A note from Lee R. Phillips

You may be starting to see warnings about your estate planning in 2010.  The estate tax has been repealed.  All Right!!!  It is a great year to die.  NOT SO FAST.  Don’t kill yourself yet.  All is not what it seems to be.

First a little reassurance that what you have done using the LegaLees system is ok.  The warning says that under a lot of estate plans the surviving spouse (spouse that lives after the first one of the couple dies) can be left out in the cold.  That won’t happen with the living trusts and wills in the Accumulation and Preservation of Wealth set.  The warning is for wills and trusts that try to control estate taxes by passing all or part of the estate directly to the children, not the surviving spouse.

My goal is and always has been to protect the surviving spouse.  The trusts are set up so that a shelter trust is created which removes the maximum amount that the deceased spouse could pass to the children without an estate tax (the “exemption equivalent” as the amount is called in the legal industry).  That amount changes.  It has been going up for the last decade, from $1 million to $3.5 million last year.  So if a couple had $4 million in assets and the husband died in 2009, a trust (Trust B) would have been created to “shelter” $3.5 million from estate taxes when the wife died.  This whole thing is explained in detail in my book, Guaranteed Millionaire.  It is a great read (not a boring financial book). (more…)