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Show Estate planning tips given at AFH 'Peace of Mind' seminar Two out of every three Americans who die have no will, and 95 out of every 100 have no comprehensive estate planning. Family members of these persons lose $100 million every week in death taxes and settlement costs, and face delays up to several years before what is left of an estate is transferred tran-sferred to heirs. In addition, minor children who have lost both parents may be placed with guardians selected by a court. At a recent senior financial peace-of-mind seminar at American Fork Hospital, attorney Mike Loveridge, who specializes in wills and family trusts, explained that proper estate planning can mean security and family preservation. preser-vation. Loveridge says that, while most people are aware of the need to plan ahead, they don't. "We all have a touch of immortality about us. We don't like to think about death, and we procrastinate making any preparations. It's always easier to do nothing." Even for persons who do not have many assets, estate planning can be vital, especially if they have minor children. If parents die without written guardianship arrangements via a will or a trust, custody battles ' which may last for months ensue in court. Children are often split up, or are placed by the court with guardians guar-dians the parents may not have chosen. For those with property or other assets, estate planning can save time, money, and frustration for a spouse or other family members left behind after death. The first step in estate planning, according to Loveridge, is to create a written plan. This can be done by either completing a will or setting up a trust. The most common estate plan is a will. Loveridge cautions that verbal "wills," and many typed or written ones, may not be valid. He strongly recommends consulting with a qualified attorney to make sure a will is legally drafted, and to ensure that titles and deeds do not conflict with the will itself. "When a title and a will conflict, the title usually controls," says Loveridge. A will can cost from $50 up to $200 or more, depending on the estate and the attorney. Although the initial cost of a will is less than that of a trust, there are drawbacks, according ac-cording to Loveridge. "All wills, by law, must be settled in probate court at the time of death," says Loveridge. "Probate is the legal procedure used to transfer assets from the deceased to his heirs." Loveridge explains that this court proceeding can cost thousands of dollars, can run into major time delays, and can become a matter of public record. In addition, estates valued over $600,000 must also pay a substantial federal estate tax. As a better alternative to wills, Loveridge recommends estate planning through revocable living trusts. With this plan (which costs about $500 to set up with an attorney), a person places titles and assets in a trust. Loveridge explains that while the trust owner is alive, he may control all the assets. At the time of his death, the trust dictates how the assets are managed and distributed among heirs. "This type of estate planning may mean preservation of the family," says Loveridge. "The owner of a trust dictates exactly how assets, even personal assets such as family heirlooms, will be distributed at the time of his death. This can prevent bitter disputes among heirs that can break families apart." Other advantages of a living trust, according to Loveridge, include the saving of time and money. After an individual's death, a trust takes only one or two hours of an attorney's time to certify the transfer of any titles there are no probate court costs or time delays. In addition, trusts are completely private, they are not a matter of public record. A trust can also save on taxes. With a trust, the federal estate tax can be eliminated on an estate up to a $1 million in value. A companion to a living trust is a "pour-over will." Loveridge explains ex-plains that this "pours over" assets to the trust that were left out at the time of the trust owner's death. It can also name guardians for minor children. Proper estate planning can bring peace of mind for everyone involved. in-volved. One couple felt much more secure and at ease themselves after setting up a living trust. "Our. children will end up with more money and fewer headaches," they said. |