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ESTATE PLANNING SMARTS
still lie awake at night worrying about your children?) If you accumulated $10.86 million or more during your peak earning years, you may be in a position to transfer some money now to save estate taxes later. This could be as simple as giving children a hand as they buy a first home or start a business (Chapter 10), or might involve complex transactions designed to shift large sums while minimizing gift tax (Chapter 15). The more money
at stake, the more attractive you may find estate planning devices like long-term trusts that will protect assets from potential future creditors and others who prey on the wealthy (see Chapters 6 and 17).
Another issue to consider: In most states parents don’t have the author- ity to make health care decisions or manage money for their kids once they turn 18, even if they still have those kids on their health insurance plans and claim them as dependents on their tax returns. That means if a young adult is in an accident and becomes disabled – even temporarily – a parent might need court approval to act on his or her behalf. So it should be a rite of passage for every 18-year-old to sign a health care proxy, living will and power of attorney.
You have grandchildren or great-grandchildren. They give you so much joy, and if you’ve done well financially, you may feel especially gener- ous toward them. Just beware the onerous 40 percent generation-skipping transfer tax (Chapter 14) that could diminish your gifts.
Keep in mind that you’re at the time in life when estate planning might become more complicated and more costly. Perhaps you’re think- ing about the legacy you would like to leave – for example, by provid- ing everyone in your family with the best possible education (Chapter 9), developing a succession plan for the family business (Chapter 12), keeping a vacation home in the family (Chapter 11) or making meaning- ful gifts to charity (Chapter 16).
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