Smart Women Protect Their Assets: Essential Information for Every Woman About Wills, Trusts, and More

225 Pages·2008·1.43 MB·English

by  Wynne A. Whitman

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From the Library of Melissa Wong
S M A R T
W O M E N
P R O T E C T
T H E I R
A S S E T S
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From the Library of Melissa Wong
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From the Library of Melissa Wong
S M A R T
W O M E N
P R O T E C T
T H E I R
A S S E T S
Essential Information
ptg
for Every Woman About
Wills, Trusts,and More
W A. W
YNNE HITMAN
From the Library of Melissa Wong
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©2009 by Wynne A. Whitman
Published by Pearson Education, Inc.
Publishing as FT Press
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This book is sold with the understanding that neither the author nor the publisher is engaged in
rendering legal, accounting, or other professional services or advice by publishing this book. Each
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All rights reserved. No part of this book may be reproduced, in any form or by any means,
without permission in writing from the publisher.
Printed in the United States of America
First Printing November 2008
ISBN-10: 0-13-236040-3
ISBN-13: 978-0-13-236040-1
Pearson Education LTD.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. Ltd.
Pearson Education North Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educatión de Mexico, S.A. de C.V.
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Library of Congress Cataloging-in-Publication Data
Whitman, Wynne A.
Smart women protect their assets : essential information for every woman about wills, trusts,
and more / Wynne A. Whitman. — 1st ed.
p. cm.
ISBN 0-13-236040-3 (pbk. : alk. paper) 1. Estate planning—United States—Popular works.
2. Tax planning—United States—Popular works. 3. Women—Legal status, laws, etc. I. Title.
KF750.Z9W52 2008
332.024’0160820973—dc22
2008026758
From the Library of Melissa Wong
To Mom, Dad, and Stacy for their continuing
support and encouragement.
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From the Library of Melissa Wong
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From the Library of Melissa Wong
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Chapter 1: Why Should You Worry About
Estate Planning? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Why You Need to Plan . . . . . . . . . . . . . . . . . . . . . . . . . .9
Who You’re Planning For . . . . . . . . . . . . . . . . . . . . . .17
How to Get Started . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
What Should You Do Next? . . . . . . . . . . . . . . . . . . . .21
Chapter 2: What Exactly Does Your Estate
Include? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 ptg
Assets and How They’re Owned . . . . . . . . . . . . . . . .24
Everyday Estate Planning . . . . . . . . . . . . . . . . . . . . . . .36
What Should You Do Next? . . . . . . . . . . . . . . . . . . . .38
Chapter 3: Is It Really That Important to Think
About Taxes? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Inheritance Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Federal Estate Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
State Estate Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Gift Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Generation Skipping Transfer Tax . . . . . . . . . . . . . .48
Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
What Should You Do Next? . . . . . . . . . . . . . . . . . . . .50
vii
From the Library of Melissa Wong
viii Smart Women Protect Their Assets
Chapter 4: Who Makes Sure Everything You
Want to Have Happen Happens When
You’re Gone? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Guardians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Executors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
What Should You Do Next? . . . . . . . . . . . . . . . . . . . .62
Chapter 5: What Will Happen to Your
Loved Ones? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Husbands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Significant Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
Disabled Loved Ones . . . . . . . . . . . . . . . . . . . . . . . . . .70
Grandchildren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 ptg
Friends and Other Family . . . . . . . . . . . . . . . . . . . . . .72
Pooches and Other Pets . . . . . . . . . . . . . . . . . . . . . . . .72
Charities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
What Should You Do Next? . . . . . . . . . . . . . . . . . . . .75
Chapter 6: What’s a Will? What’s a Trust?
How Do You Use Them to Put Your
Plan in Place? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Last Wills and Testaments . . . . . . . . . . . . . . . . . . . . . .77
Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94
Beneficiary Designations . . . . . . . . . . . . . . . . . . . . . . .97
Meeting Your Attorney . . . . . . . . . . . . . . . . . . . . . . . . .98
What Should You Do Next? . . . . . . . . . . . . . . . . . . .105
From the Library of Melissa Wong
Contents ix
Chapter 7: What If You Want to Get Fancy
with Your Planning? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Sharing the Wealth . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
It Is Better to Give Than to Receive . . . . . . . . . . . .109
Incentive and Other Trusts . . . . . . . . . . . . . . . . . . . .110
Generation Skipping Trusts . . . . . . . . . . . . . . . . . . . .111
Life Insurance and Life Insurance Trusts . . . . . . .111
Residence Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
Grantor Retained Annuity Trusts . . . . . . . . . . . . . .115
Charitable Trusts and Private Foundations . . . . .116
Individual Retirement Accounts . . . . . . . . . . . . . . .118
Asset Protection Trusts . . . . . . . . . . . . . . . . . . . . . . . .120
Family Limited Partnerships and Limited
Liability Companies . . . . . . . . . . . . . . . . . . . . . . . . . .120
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What Should You Do Next? . . . . . . . . . . . . . . . . . . .121
Chapter 8: What If You Get Sick and Can’t
Make Decisions? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . .125
Advance Directives—Living Wills and
Health Care Proxies . . . . . . . . . . . . . . . . . . . . . . . . . .130
Document Review . . . . . . . . . . . . . . . . . . . . . . . . . . . .138
What Should You Do Next? . . . . . . . . . . . . . . . . . . .139
Chapter 9: Is There Anything Else You Should
Do to Be Prepared? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
The Important Paper Drawer . . . . . . . . . . . . . . . . . .142
Letters of Instruction . . . . . . . . . . . . . . . . . . . . . . . . . .143
Funeral Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
What Should You Do Next? . . . . . . . . . . . . . . . . . . .149
From the Library of Melissa Wong