Month: January 2023

Why Every Adult Needs A Living Will

Post author By Sara Thomas
Post date January 20, 2023
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What Is A Living Will?

A living will, also called an advance healthcare directive, is a legal document that tells your loved ones and doctors how you would want your medical care handled if you become incapacitated and cannot make such decisions yourself, particularly at the end of life. Specifically, a living will outlines the procedures, medications, and treatments you would want and would not want to prolong your life if you cannot make such decisions yourself.

For example, within the terms of your living will, you can articulate certain decisions, such as if and when you would want life support removed should you ever require it and whether you would want hydration and nutrition supplied to prolong your life.

Beyond instructions about your medical care, a living will can even describe what type of food you want and who can visit you in the hospital. These are critical considerations for your well-being at a time of greatest need for you. And if you haven’t provided any specific instructions, decisions will be made on your behalf that you likely will not want.

Living Will vs. Last Will And Testament

Upon death, a last will and testament ensures your assets are distributed as you choose. Note that your last will only deals with your assets and only operates upon your death. In contrast, a living will is about you, not your assets. And it operates in the event of your incapacity, not your death.

In other words, a last will tells others what you want to happen to your wealth and property after you die, while a living will tells others how you want your medical treatment managed while you are still alive. And that’s really important for you and your care!

Living Will vs. Medical Power of Attorney

Medical power of attorney is the part of an advance healthcare directive that allows you to name a person, known as your “agent,” to make healthcare decisions for you if you are incapacitated and unable to make those decisions yourself.

Simply put, medical power of attorney names those who can make medical decisions in the event of your incapacity, while a living will explains how you would want your medical care handled during your incapacity.

Why Having A Living Will Is So Important

A living will is a vital part of every adult’s estate plan, as it can ensure your medical treatment is handled exactly the way you want if you cannot communicate your needs and wishes. Additionally, a living will can prevent your family from undergoing needless trauma and conflict during an already trying time.

Without a living will, your family would have to guess what treatments you might want, and your loved ones are likely to experience stress and guilt over the decisions they make on your behalf. In worst cases, your family members could even end up battling one another in court over who should manage your medical care and how.

Should You Rely On A Living Will Created Online?

While there is a wide selection of living wills, medical power of attorney, and other advance directive documents online, you likely want more guidance and peace of mind than is available through an online service to support you to address such critical decisions adequately. Regarding your medical treatment and end-of-life care, you have unique needs and wishes that cannot be anticipated or adequately addressed by generic documents or without the counseling and guidance we can provide through your decision-making process.

To ensure your directives are tailored to suit your unique situation, work with experienced estate planning professionals like us, your local Personal Family Lawyer® to support you to create and/or review your living will.

How We Can Help

Even if you have a professionally prepared and well-thought-out living will, it won’t be worth the paper it’s printed on if nobody knows about it. A living will comes into effect the second you sign it, so you should immediately deliver copies to your agent, alternate agents, primary care physician, and other medical specialists.

Additionally, don’t forget to give those folks new versions whenever you update those documents and have them destroy the old documents. As your Personal Family Lawyer®, delivering the latest copies of your living will and other estate planning

documents is a standard part of our Life & Legacy Planning Process. We ensure that everyone who needs your documents always has the latest version.

And since unforeseen illness or injury could strike at any time. Don’t wait to plan your will. Contact us to get this critical document in place. Call us today to schedule an appointment.

400 Sugartree Lane, Suite 520

Franklin, TN 37064

Office: (615) 576-5065

Email: info@augustlawpllc.com

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3 Essential Questions To Ask Before Creating Your Will Online

Post author By Sara Thomas
Post date January 13, 2023
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Know what’s possible—and what’s not

A great way to start educating yourself is by watching this training video by family financial and legal expert Ali Katz. This free, one-hour training clarifies what you can do yourself online, and when you really need a lawyer’s support. The training also gives you access to an online tool you can use to create an inventory of all your assets, which is critically important to leave to your loved ones, no matter how much or little you have to pass on.

Meanwhile, if you are looking to create your own will online, first ask yourself the following 3 questions. After considering these 3 questions, if you determine you can create your own will online, you should seriously consider having us review it for you once you complete the document to be certain you’ve properly covered everything and everyone you care about.

01 – Will your online will keep your family out of court?

When considering creating your own will online, the first question you need to ask yourself is: “Should I become incapacitated or when I die, do I want to keep my family out of court?” If your answer is “Yes, I 100% want to keep my family out of court,” then creating your own will online may not be the best idea.

While a will is a necessary element of most estate plans, it’s typically just one small part of an integrated plan. And a will by itself won’t keep your family out of court. In order for assets covered by your will to be transferred to your beneficiaries, your will must first pass through the court process known as probate.

During probate, the court oversees the administration of your estate and assets, ensuring your assets are distributed according to your wishes, while ensuring any creditors of your estate are paid, and managing any disputes that arise. Probate is lengthy, expensive, and open to the public, so you’ll want to have more than a will in place if you have any assets that would go through court in the event of your incapacity or death.

To avoid probate and keep your assets out of court, your will should be combined with other planning documents and important conversations as well. These documents include a properly drafted and funded trust, up-to-date and effective beneficiary designations, and you’ll also need to have conversations with family to ensure they won’t end up in conflict due to your lack of preparation.

Beneficiary designations and trust planning can be complex, and if you have assets that would otherwise pass through the court process, it may be difficult to ensure you are making all the right choices for your loved ones and your assets using an online document service. This is why we recommend that you begin your estate planning with a Family Wealth Planning Session, during which we can help you look at your family dynamics and your assets, and then we can assess what would happen to everything you have and everyone you love, when something happens to you. During this planning session, we can then determine the right plan for you and the people you love to help keep them out of court when something happens to you.

02 – Is your online will’s execution legally valid?

If you do not have assets that would go through the court process, and you want to create an online will simply to name someone as your executor in the event of your death, you’ll want to make sure your online will is legally valid.

Each state has specific laws stipulating how a will must be documented and signed to be legally binding. If you fail to execute your will in accordance with these laws, the court can deem your will legally invalid.

If the court deems your will invalid, it’s as if the document never existed. In that case, a judge would name the person it considers is best to handle your estate, and your assets would be distributed according to state intestacy laws, which typically give priority to your closest living blood relatives.

If you want to ensure your online will is legally valid, you can look up your state’s laws governing the valid execution of a will. From there, make certain you sign it properly, with the right number and type of witnesses.

03 – Does your online will properly name an executor?

If you are going to create your own online will, the last question to consider is whether the will properly names an executor, along with back-up executors, and it ensures that those you name will be appointed by the court in the event of your death.

An executor, also called a “personal representative,” is the person responsible for carrying out the instructions in your will. Your executor is typically named in your will and appointed by the court to locate and manage your assets, pay any outstanding debts and taxes you owe, and distribute your remaining assets to your beneficiaries.

If you don’t name an executor in your will, or the person you choose is determined to be unfit, the court will appoint an executor for you. As an example of how things can go wrong here, one common situation in which a named executor can be determined to be unfit is if your will does not waive the requirement for the executor to obtain a bond, and your named executor cannot qualify for a bond. This is a frequent mistake made by those who create their own will online.

If you’re unaware of these requirements when creating your online will, your chosen executor could be deemed unfit, leaving the choice up to the court. We can make certain your choice for executor is properly qualified, so you can rest easy knowing someone you know and trust will handle your final affairs and support your loved ones when you no longer can.

The Professional Support You Deserve

As you can see, creating your will online without a lawyer’s help is a huge gamble, and if you get it wrong, it can cost your family a lot more than money. Rather than relying on a one-size-fits-all document service, meet with us, your Personal Family Lawyer® to create your will and other estate planning documents.

Our Life & Legacy Planning Process is specifically designed to put in place the right combination of planning solutions to fit with your unique asset profile, family dynamics, budget, as well as your overall goals and desires. Until then, if you need to get your plan started or need us to review your existing documents, contact us today.

400 Sugartree Lane, Suite 520

Franklin, TN 37064

Office: (615) 576-5065

Email: info@augustlawpllc.com

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Creditors And Your Estate Plan

Post author By Sara Thomas
Post date January 11, 2023
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Debt After Death

When an individual dies, someone will handle his or her affairs, and this person is known as an executor. The executor can either be someone of the individual’s choice, if he or she planned in advance, or someone appointed by the court in the absence of planning. The executor opens the probate process, during which the court recognizes any will that’s in place and formally appoints the executor to administer the deceased’s estate and distribute any outstanding assets to their loved ones.

During this process, the estate’s assets are used to pay any outstanding debt. This usually includes all of an individual’s assets, although it does not include assets with beneficiary designations, such as 401(k) plans and insurance policies. The estate does not own these assets, and they pass directly to the named beneficiaries. Given these factors, if an individual’s assets are subject to probate and the person has outstanding debt, their beneficiaries will receive a smaller share of anything left to them in the estate plan.

How Unsecured Debts Are Handled After Death

Typically, unsecured debts, such as credit card debts, are the last form of debt the estate repays. In most cases, the estate first repays any outstanding secured debts, including car and mortgage loans. Following this, the estate repays the legal and administrative fees associated with executing the deceased’s will. From there, the estate repays any outstanding unsecured debt, including credit card balances. Usually, if the estate lacks the assets to repay these debts, creditors have no choice but to accept the loss.

However, in some states, probate laws may dictate how the deceased’s creditors can clear these debts in other ways, such as by forcing the sale of the deceased’s property. It’s worth noting that there is a time limit for creditors to claim against an estate after the deceased dies, and this time frame varies between states.

Avoiding Probate

There are several things you can do to avoid probate. Perhaps the most common involves establishing a revocable living trust. Since the trust, not the estate, owns the assets, assets held by a properly funded and maintained trust do not have to go through the probate process.

Despite this, creating a living trust does not guarantee an individual’s assets will receive protection from creditors if that person has debt. What it does mean is that his or her heirs may have more flexibility compared to probate. In other words, by creating a living trust, your trustee may be able to negotiate with creditors more easily to reduce any outstanding debt. In theory, creditors may still sue to repay the debt in full. However, since this could involve significant costs, creditors may prefer to settle instead.

When Do Surviving Family Members Pay The Deceased’s Debts?

Most of the time, it’s unnecessary for surviving family members to pay the deceased’s debt with their own money. Instead, as noted above, payment of the debts are either paid out of the deceased’s estate, or if there is no estate, the debts are extinguished. However, there are some exceptions to this, including the following:

● Co-signing loans or credit cards: If someone cosigns a loan or credit card with the deceased, that individual is responsible for clearing any outstanding debt associated with that account.

● Having jointly owned property: If an individual has jointly owned property or bank accounts with the deceased, that person is responsible for clearing any outstanding balances associated with these assets.

● Community property: In some states, including California, Arizona, Nevada, Louisiana, Idaho, Texas, Washington, New Mexico, and Wisconsin, the surviving spouse is required to clear any outstanding debt associated with community property. Community property is any property jointly owned by a married couple.

● State laws: Some states require surviving family members, or the estate more generally, to clear any debts associated with the deceased’s healthcare costs. Additionally, if the estate’s executor failed to follow a state’s probate laws, it might be necessary for him or her to pay fines for doing so.

What To Do When Someone Dies With Debt

When someone dies with outstanding debt, it’s important to take swift action to handle their affairs and negotiate their debts. Below are some steps to follow when faced with this scenario:

01 – Understand Your Rights

Since probate laws vary between states, it’s a good idea to thoroughly research the probate process in our state, or hire a lawyer to handle the estate for or with you. Many states require creditors to make claims within a specific period, while also requiring surviving family members to publicly declare the deceased’s death before creditors can collect any outstanding debt. It’s also against the law for creditors to use offensive or unfair tactics to collect outstanding credit debt from surviving family members. It’s generally a good idea to ask creditors for proof of any outstanding debt before paying.

02 – Collect Documents

Collecting documents can be fairly straightforward, particularly if the deceased left all their vital financial papers in a single location. If the surviving family members cannot locate these documents, they can request the deceased’s credit report, which lists any accounts in the deceased’s name. As your Personal Family Lawyer®, we can do this for you, as part of our post-death support services.

03 – Cease Additional Spending

This is essential to prevent any debts in the deceased’s name from increasing further, even if there is another person authorized to make payments. Ceasing additional spending. including canceling any recurring subscriptions, also helps prevent unnecessary complications when negotiating with creditors.

04 – Inform Creditors

Proactively contact the deceased’s creditors to look into options for negotiating the debt, and notify credit bureaus of the death. To complete this process, it’s useful to have several copies of the death certificate to share with insurance companies and

creditors. Afterwards, ask to close all accounts in the deceased’s name, and request the credit bureaus freeze the deceased’s credit, preventing others from unlawfully getting credit in his or her name.

05 – Close The Estate

Once all debt has been paid off, forgiven, or extinguished, the executor can officially close the estate. The process for doing this varies based on how assets and debts were held, so do not go into this part alone. Contact us to find out how we can support you.

We Can Help Ensure Your Family Doesn’t Get Stuck With Your Debt

Effective estate planning involves taking care of your affairs, and this includes ensuring your debts will be handled in such a way that your family isn’t left with a big mess or inadvertently forced into court. Consider scheduling a Family Wealth Planning Session with us, your Personal Family Lawyer®, to determine how we can help protect your assets and prevent creditors from reducing the gifts you want to leave your loved ones after death. Contact us today to learn more.

400 Sugartree Lane, Suite 520

Franklin, TN 37064

Office: (615) 576-5065

Email: info@augustlawpllc.com

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10 Things You Should Know About Living Wills

Post author By Sara Thomas
Post date January 6, 2023
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01 | WHAT IS A LIVING WILL

how you would want decisions related to your medical care handled in the event you become incapacitated and are unable to make such decisions yourself, particularly at the end of life. Specifically, a living will outline the procedures, medications, and treatments you would want—or would not want—to prolong your life if you become unable to discuss such matters with doctors yourself.

For example, within the terms of your living will, you can spell out certain decisions, such as if and when you would want life support removed should you ever require it, and whether you would want hydration and nutrition supplied to prolong your life.

Beyond instructions about your medical care, a living will can even describe what kind of food you want and who can visit you in the hospital. We’ll cover more of the specific decisions and scenarios addressed in a living will in more detail below.

02 | LIVING WILL VS LAST WILL & TESTAMENT

A last will and testament is used to ensure your assets are divided upon your death in the way you choose. Note that your will only deals with your assets, and it only operates upon your death. In contrast, a living will is about you, not your assets, and operates in the event of your incapacity, not your death.

03 | WHAT IS AN ADVANCE DIRECTIVE AND HOW IS IT THE SAME OR DIFFERENT THAN A LIVING WILL?

An “advanced directive” or “advance healthcare directive” are both general terms that describe legal documents that are related to your healthcare needs. Typically, an advance healthcare directive will include a living will (with instructions for how you want your medical care handled), and a medical power of attorney (naming the people you want making decisions for you, and giving them authority to talk with your medical team).

04 | LIVING WILL VS MEDICAL POWER OF ATTORNEY

A medical power of attorney is the part of an advance healthcare directive that allows you to name a person, known as your “agent,” to make healthcare decisions for you if you’re incapacitated and unable to make those decisions yourself. While medical power of attorney is an advance directive that names who can make healthcare decisions in the event of your incapacity, a living will explains how your medical care should be handled.

For example, if you become seriously ill and are unable to manage your own medical treatment, a living will can help guide your agent to make these decisions on your behalf, letting them know how you want decisions made. But it’s the medical power of attorney part of the document that says who should be making the decisions. In this way, medical power of attorney and a living will work closely together, and for this reason, they are sometimes combined into a single document.

Now, this is critically important to note: Not all living will form documents or templates include a medical power of attorney or the proper legal authorizations to give whoever you want making decisions for you (your agent) the legal authority to access your medical records. Therefore, if you are completing an online living will or advance healthcare directive, or supporting a family member to do so, make absolutely sure that the document legally names a decision-maker with at least two backup decision-makers, gives that person legal authority under HIPAA to access your medical records, AND provides specific and detailed instructions regarding how your medical care should be provided in the event of incapacity.

05 | WHY IS A LIVING WILL SO IMPORTANT?

A living will is a vital part of every adult’s estate plan, as it can ensure your medical treatment is handled exactly the way you want in the event you become unable to communicate your needs and wishes yourself. Additionally, a living will can prevent your family from undergoing needless stress and conflict during an already trying time.

Without a living will, your family will have to guess what treatments you might want, and your loved ones are likely to experience stress and guilt over the decisions they make on your behalf. In the worst cases, your family members could even end up battling one another in court over how your medical care should be managed.

06 | EVEN YOUNG PEOPLE NEED A LIVING WILL

Although you may think that a living will is something that only the elderly or older people need, the fact is, you can experience a serious accident or illness at any age, which would leave you incapacitated and unable to communicate your wishes for medical care. For this reason, all adults over age 18 should have both a living will and a medical power of attorney in place.

One tragic example of just how horrific things can become when a young person becomes incapacitated without a living will in place is the case of Florida’s Terry Schiavo, who spent 15 years in a vegetative state after suffering a heart attack at age 26. Because she had neither a living will nor a medical power of attorney, Schiavo’s young husband fought her parents in court for years for permission to remove her from life support, specifically to remove the hydration and nutrition that was keeping her alive. The resulting litigation made news headlines around the world and exposed a deep divide among Americans over the right-to-die movement.

07 | DECISIONS AND SCENARIOS ADDRESSED IN A LIVING WILL

A few of the most common types of decisions, treatments, and scenarios typically addressed in a living will include the following:

TUBE FEEDING

You can include instructions about if and for how long you would want tube feeding used to supply you with nutrients and fluids needed to prolong your life.

RESUSCITATION (CPR & DNR)

Depending on whether or not you would want to be resuscitated in the event your heart stops, you can include what’s known as a Do-Not-Resuscitate (DNR) order in your living will. A DNR can also be a stand-alone document.

INTUBATION & MECHANICAL VENTILATION

You can state if and for how long you would want to be intubated and placed on a mechanical ventilator if you could not breathe on your own. This has become particularly important during the pandemic, since in severe COVID-19 cases, patients often require intubation, which involves putting you into a medically induced coma and inserting a tube into your windpipe, allowing oxygen to be pumped directly to your lungs using a ventilator.

PAIN MANAGEMENT & PALLIATIVE CARE

These are instructions about the types of pain management medications you would—or would not—want to be prescribed to you; if you want to die at home; as well as any other interventions you might want for comfort and pain management at the end of life.

ORGAN/TISSUE DONATION

You can specify in your living will if you want to donate your organs and/or tissues for transplant following your death. Note that you will likely receive life-sustaining measures until any procedures are completed to remove your organs and tissues.

08 | SHOULD YOU DO IT YOURSELF WITH AN ONLINE LIVING WILL?

While you’ll find a wide selection of generic living wills, medical power of attorney, and other advance directive documents online, you may not want to trust these do-it-yourself solutions to adequately address such critical decisions. When it comes to your medical treatment and end-of-life care, you have unique needs and wishes that just can’t be anticipated by fill-in-the-blank documents.

To ensure your directives are specifically tailored to suit your unique situation and that you actually get it done instead of just knowing you need to get it handled and never do it, work with experienced planning professionals like your Personal Family Lawyer® to create—or at the very least, review—your living will, medical power of attorney, and other documents.

We don’t just ensure your documents get created correctly; we have processes to keep you moving forward beyond procrastination and actually get them signed (which is one of the biggest risks to your family), as good intentions alone won’t keep your family out of court and out of conflict should you become incapacitated without a signed (and updated) plan in place.

09 | COMMUNICATION IS VITAL

Even if you have the most well-thought-out and professionally prepared living will around, it won’t be worth the paper it’s printed on if nobody knows about it. Both living wills and medical power of attorney go into effect the second you sign them, so you should immediately deliver copies to your agent, your alternate agents, your primary care physician, and any other medical specialists you’re seeing.

And don’t forget to give those folks new versions whenever you update the documents and have them tear up the old documents. This is a standard part of our practice when serving our clients, so when you work with us to create your legal documents, we’ll ensure that everyone who needs to have your documents always has the latest version.

10 | DON’T WAIT UNTIL IT’S TOO LATE

Your living will and medical power of attorney must be created well before you become incapacitated and unable to make your own decisions. You must be able to clearly express your wishes and consent in order for these planning documents to be valid, as even slight levels of dementia or confusion could get them thrown out of court.

Not to mention, an unforeseen illness or injury could strike at any time, at any age, so don’t wait—contact your Personal Family Lawyer® right away to get these vital documents put in place.

A COMPREHENSIVE PLAN FOR INCAPACITY

A living will and medical power of attorney are just two of the legal documents you need as part of your overall plan for incapacity. You will also likely need other estate planning tools, such as a durable financial power of attorney and a revocable living trust, in order to have a truly comprehensive incapacity plan. We see estate planning as so much more than planning for death, which is why we call it Life & Legacy Planning—because it’s about your life and the legacy you are creating by the choices you make today.

If you’ve yet to create your incapacity plan, schedule a Family Wealth Planning Session™ right away, so as your Personal Family Lawyer®, we can advise you about the proper planning vehicles to put in place. And if you already have an incapacity plan—even one created by another lawyer—we can review it to make sure it’s been properly set up, maintained, and updated. Contact us today to get started.

400 Sugartree Lane, Suite 520

Franklin, TN 37064

Office: (615) 576-5065

Email: info@augustlawpllc.com

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Trusts & Taxes: What You Need To Know

Post author By Sara Thomas
Post date January 4, 2023
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TWO TYPES OF TRUSTS

There are two primary types of trusts — revocable living trusts and irrevocable trusts — and each one comes with different tax consequences.

REVOCABLE LIVING TRUST

A revocable living trust, also known simply as a living trust, is by far the most commonly used form of trust in estate planning. And as long as you are living, there is absolutely no tax impact of creating a living trust.

A living trust uses your Social Security Number as its tax identifier, and this type of trust is not a separate entity from you for tax purposes. However, a living trust is a separate entity from you for the purpose of avoiding the court process called probate, and this is where the confusion regarding taxes often comes from. But before we explain the tax implications of a living trust, let’s first describe how a living trust works.

A living trust is simply an agreement between a person known as the grantor, who gives assets to a person or entity known as a trustee, to hold those assets for the benefit of a beneficiary(s). In the case of a revocable living trust, the reason there are no tax consequences is because you can revoke the trust agreement or take the assets back from the trustee at any time, for any reason. In fact, as long as you are living, you can change the terms of the trust, change the trustee, change the beneficiaries, or terminate the trust altogether.

However, upon your death, a revocable living trust becomes irrevocable, and this is when tax consequences come into play. Following your death, the trustee you’ve named will step in and take over management of the trust assets, and one of the first things that your trustee will do is to apply for a tax ID number for the trust. At this point, the trust becomes a taxable entity, and any income earned inside of the trust that is not distributed in that year would be subject to income taxes, at the taxable rates of the trust (or at the tax rates of the beneficiaries, if income is distributed to the beneficiaries).

IRREVOCABLE TRUSTS

An irrevocable trust is created when you make a gift to a trustee to hold assets for the benefit of the beneficiary, and you cannot take back the gift you’ve made to that individual.

When you create an irrevocable trust, either during your lifetime, or at death through a testamentary trust (a trust that arises at the time of your death through your will), or through a revocable living trust creating during your lifetime, the trust is a separate tax-paying entity, and it is either subject to income tax on the earnings of the trust at the rates of the trust or at the rates of the beneficiaries.

Unlike a revocable living trust, an irrevocable trust is (as the name implies) irrevocable. This means that the trust’s terms cannot be changed, and the trust cannot be terminated once it’s been executed. When you transfer assets into an irrevocable trust, you relinquish all ownership of those assets, and your chosen trustee takes total control of the assets transferred into the name of the trust. Because you no longer own the assets held by the trust, those assets are no longer considered part of your estate, and as long as the trust has been properly maintained, the assets held by the trust are also protected from lawsuits, creditors, divorce, serious illness and accidents, and even bankruptcy.

However, as mentioned earlier, irrevocable trusts also come with tax consequences. As of 2022, the income earned by an irrevocable trust is taxed at the highest individual tax bracket of 37% as soon as the undistributed taxable income reaches more than $13,450. To avoid this high tax rate, in some cases, an irrevocable trust can be prepared so that the tax consequences pass through to the beneficiary and are taxed at his or her rates, which are typically much lower.

We often set up a trust in this way when creating a Lifetime Asset Protection Trust for a beneficiary. When set up like this, the trust can provide the beneficiary with protection from common life events, such as serious debt, divorce, debilitating illness, crippling accidents, lawsuits, and bankruptcy, without being taxed at such a high rate on such little income.

If you have a trust set up, and would like us to review its income tax consequences for your loved ones upon your death, meet with us, your local Personal Family Lawyer®.

THE ESTATE TAX: WHAT IT IS & WHO PAYS IT

The estate tax is a tax on the value of a person’s assets at the time of their death. Upon your death, if the total value of your estate is above a certain threshold amount, known as the federal estate tax exemption, the IRS requires your estate to pay a tax, known as the estate tax, before any assets can be passed to your beneficiaries.

As of 2023, the federal estate tax exemption is $12.92 million per individual. Simply put, if you die in 2023, and your assets are worth $12.92 million or less, your estate won’t owe any federal estate tax. However, if your estate is worth more than $12.92 million, the amount of your assets that are greater than $12.92 million will be taxed at a whopping 40% tax rate.

You can reduce your estate tax liability—or even eliminate it all together—by using various estate planning strategies. Most of these strategies are fairly complex and involve the use of irrevocable trusts, but such strategies are without question worth it, if you can save your family such a massive tax bill. To learn how to save your family from such a major tax burden, meet with us, your Personal Family Lawyer® to discuss your options.

And please note, we are only speaking about the federal estate tax here. Currently 12 states have their own estate tax, which are separate from the federal estate tax. We’ll cover the specifics of what happens in our state regarding your estate tax, when we have a Family Wealth Planning Session. Give us a call to schedule yours, if you have not yet had a Planning Session with us.

THE FUTURE ESTATE TAX

The current estate tax exemption is set to expire on Jan. 1, 2026, and return to its previous level of $5 million, which when adjusted for inflation is expected to be around $6.03 million. Here’s one thing we know for sure: We don’t know what the estate tax exemption will be at the time of your death, and we also don’t know what the value of your assets will be at the time of your death. Because of this, when you plan with us, we will ensure that we put in place planning strategies to protect your estate from estate taxes, regardless of the amount of the estate tax exemption or the size of your assets.

WE’RE HERE FOR YOU

If you are trying to decide whether a revocable living trust, irrevocable trust, Lifetime Asset Protection Trust, or some other estate planning vehicle is the right solution for you and your family, meet with us, as your Personal Family Lawyer®. We will support you in making that decision, so your estate can provide the maximum benefit for the people you love most, while paying the least amount of taxes possible. Call us today to schedule your visit.

As your Personal Family Lawyer® firm, we will serve as your trusted, lifelong guide to ensure you make a lifetime of wise, forward-thinking choices for yourself and those you love most. And we will offer your loved ones the support they need to make the most important legal and financial decisions when you are no longer there to guide them. With our expert, caring counsel, you can rest easy knowing that the coming wealth transfer will offer you and your loved ones the most benefit possible, with the least amount of risk. Schedule your visit with us to get your Life & Legacy Plan started today.

400 Sugartree Lane, Suite 520

Franklin, TN 37064

Office: (615) 576-5065

Email: info@augustlawpllc.com

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