Estate Planning Essay

The objective of this discussion is to review some of the myths and realities of estate planning. A number of articles have been written on the subject but let's see if we can't put a different spin on it by keeping it simple. By dispelling some of the common misconceptions, we will have a better understanding of how important it is to take positive action to keep our estate plans in order.

The Economic Growth and Tax Reconciliation Relief Act of 2001 (EGTRRA) threw many individuals for a loop when it came to estate planning. Tax laws are never simple but EGTRRA added a level of confusion rarely seen in advanced planning. For instance, between now and 2011 the federal estate tax is scheduled to decrease, disappear and then spring back to life.

The irrevocable nature of the trust can provide estate tax savings while the insurance provides a cost effective way to pay estate taxes (depending on age and health). The appeal of an irrevocable life insurance trust is that the death proceeds of the policy are not included in the insured's estate. If kept out of the decedent's estate, the death proceeds will not increase the estate tax burden. The irrevocable life insurance trust is a double winner because, not only are the death proceeds outside the insured's estate, but the proceeds can be available to meet estate liquidity

You owe it to yourself and your family to make sure your estate plan is in order. Conversation is fine, but taking action is crucial. Make the commitment to take at least one step in your estate planning efforts in the next three days. It could be as simple as organizing your paperwork, compiling a list of your assets and/or updating your beneficiary designations. If you do not have an updated will, you should make that a priority. You should also take steps to have sufficient death benefit protection structured in the most tax-efficient manner to achieve your