Who will inherit your estate?
by Dennis Chilcote, Senior Account Executive, Smith Barney, Seattle
Have you ever stopped to consider who will inherit the rewards of your life's work? Will it be by your family? A favorite charity? Or will it be the federal government?
Without proper planning, the assets you have accumulated through years of hard work and careful saving could be at risk upon your death.
You may be worth more than you think! Estate taxes can currently amount to as much as 55% of all assets held in your name at the time of death. And, after you have completed an inventory of your assets, you may be surprised to find out that you're worth much more than you thought.
To determine your estate-tax bill, you must value all property you hold an interest in, including your home, business, stocks, bonds, personal possessions, retirement plans, and the proceeds from personal or group life insurance policies. In some cases, a federal excise tax may be assessed against excess accumulations within your retirement plan, eroding your estate further.
Probate could also prove an inconvenience for your beneficiaries and tie up assets for many months, or even years. During the probate process, your assets will remain under the jurisdiction of the courts. Probate fees, including court costs and attorney or executor fees, can result in significant estate shrinkage. In addition, the proceedings are a matter of public record, which could infringe upon your family's privacy.