1. Avoid Probate:  Save your loved ones the cost, stress and delay of going through the legal process.
  2. Step Up in Basis:  A Step up in basis means that your beneficiary’s will receive a readjustment of the value of an appreciated asset for tax purposes upon inheritance.  For instance if you purchased your property for $250,000 but the value at the time of your death is $1 million then your beneficiary(ies) will inherit the property with the basis of $1 million which means they don’t have to pay taxes on the increased value.
  3. The Personal Estate Tax Exemption: The personal exemption allows a set dollar amount of property to pass tax-free, no matter who inherits it. For deaths in 2017, the individual exemption is $5.49 million. The amount is indexed for inflation, so it will probably increase in future years.  If you have made taxable gifts during your life, the amount of your personal exemption will be reduced by the amount of those taxable gifts.
  4. The Marital Deduction: All property left to a surviving spouse passes free of estate tax. (I.R.C. § 2056(a).)  The marital deduction is not allowed for property left to noncitizen spouses, but the personal estate tax exemption can be used for property left to noncitizen spouses.
  5. The Charitable Deduction: All property left to a tax-exempt charity is also free of estate tax. (I.R.C. § 2055(a).)
  6. Special Rules For Married Couples: A surviving spouse gets a big tax break. If the deceased spouse didn’t use up his or her individual tax exemption, the survivor can use what’s left. That gives the couple a total exemption of twice the individual exemption amount, which can be split between them in any way that provides the greatest tax benefit. For example, say a man dies and leaves $4 million to his widow; no estate tax is owed because property left to a spouse is tax-free. The widow then dies, leaving $7 million (her own $3 million plus the $4 million she inherited from her husband) to their children.

At Laguna Legal our complete estate plan includes:  Revocable Living Trust, Certification of Trust, Pour-over Will, Financial Power of Attorney and Healthcare Directive.  The cost for a Complete Living Trust Estate Plan is: $750 for a Single Person or $1,000 for a married couple.  Please call us for more information (949) 497-9800.

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