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Estates real estate and plans are a mystique all its own on the average viewer. It is certainly a complex world of tax rules and regulations where inherited assets are taxed to death. How does this affect you and you are now Estate Assets possess?

Firstly, what is a real estate? Simply put, it is the sum of all assets including your house, car, pension and other retirement funds, collectibles, and possibly the value of a company minus the liabilities constitutes your estate. Also throughout the Estate is a life insurance policy owned by the property owner.

When buying life insurance, that the assets and it will be a part of your property. As an example, if you have to save $ 250,000 over your life and you wanted it that your children would be an advantage. With the possession of a $ 250,000 life insurance for your children as beneficiaries, you have an immediate asset, an Instant Estate. Same result.

Estate taxes came into play at the end of the 19th Century as a means of redistributing wealth. As a result of the inheritance tax is now based on a tax on the beneficiaries of the estate (eg children) are due and payable within 9 months after the death of the second spouse in a typical family situation. The tax rate is anywhere from 18% -45%. A very large tax bill to pay for all.

There is a long list of entertainers, actors, singers and business people who do not have an estate plan in force at the time of death. Joe Robbie was the owner of the Miami Dolphins football in the year they went unbeaten and won the Superbowl. He was a lawyer, sports enthusiasts and experienced entrepreneurs. But when he died he left a large property with property taxes of more than $ 47000000 and no estate plan. His heirs were a nightmare for a family relationships as a result and eventually sold the football team at a bargain price ...... just to pay the tax.

In contrast, Jackie Onassis and Malcolm Forbes through the intelligent use of investment funds and life insurance policies leave great wealth and little or no taxes.

How does the life insurance? Once an asset is tallied by the estate attorney and tax, trusts are up to remove assets from the estate (such as charitable remainder trusts), a net taxable estate is reached and the proposed tax and inheritance tax is calculated. For ex. a plot of land worth far more than the annual property tax exclusion of $ 2,000,000 is expected to pay $ 2.5 million in estate taxes.

The insurance underwriter, which is produced as a survivor life insurance or
"" Second to the 'politics' assured that 2 people on a plan. Underwriting is generally easier on 2 Life in contrast to a less healthy spouse may be a better premium because of the healthier spouse.
The death benefit is calculated on the basis of the anticipated amount of tax payable Estate, $ 2.5 million in this case the name and the beneficiaries are the children who are the 9 months to pay the inheritance tax.

An Irrevocable Life Insurance Trust (ILIT) is then to protect the policy and remove it from the estate. Remember that the ownership of a life insurance policy to an immediate income for the property. The ILIT keeps the politics of real estate as an asset includible.

After the death of the first spouse no inheritance tax due, so that no death is paid. After the death of the second spouse, the estate tax is now, the ILIT will be dissolved and the proceeds from the $ 2.5 million lives are released. The recipients now have the liquidity to pay off inheritance tax. You do not have to worry about selling assets just to pay taxes, family relations are not changed because of taxes and the assets of the estate is preserved.

Can this be done for you? Possibly. Suppose you have a relative, say, Aunt Mary, a kind of property. You have a house, a small company pension funds, collectibles, art, jewelry, cars or stamps etc.. and you never even on the $ 2 million estate tax exclusion, because you thought to yourself, "" Hey ... I'm not rich! "". Finally, Aunt Mary dies and leaves you with 100 hectares of prime real estate in Maine and the current value of the property will take you far beyond the estate tax exclusion, and now your children have to pay an inheritance tax in 9 months if you died tomorrow. I've done it.

I hope this article has given you a snapshot of what you can to plan. By using a team of an estate inheritance tax accountant, lawyer and a life insurance broker to protect everything you worked so hard, for your family.

Alan P. Fernandez, president of Foundation Financial Services with a BBA in Finance and Economics from Iona College, studied under the LIFE Underwriters Training Council and a Certified Financial Planner programs and with 15 years in the insurance industry is a known problem solver between companies and private individuals alike. He is also an insurance instructor with Citicorp. He can be reached at afern109@optonline.net or visit the website at http://www.foundationfinancialservicesny.com FFS