Estate Planning – Remainder Interests, Taxes


What are remainder interests?

The tax code will allow individuals to set up charitable remainder trusts and establish qualified personal residence trusts to own their personal residence and yet leave it to their children without estate tax. The tax code allows such a thing to persons who belong to the high income tax bracket.

Do I have to pay taxes?

The US tax code does not tax life insurance proceeds as income; consequently, a life insurance trust can be used to pay estate taxes. If the decedent holds any incidents of ownership like the ability to remove or change beneficiary, the proceeds will remain in his or her estate. Because of this, the trust vehicle is used to own the life insurance policy and it must be irrevocable to avoid inclusion in the estate.

What is estate planning mediation?

Estate planning mediation acts as preventative measure against future litigation. In the mediation session, you can include your family members and beneficiary organization representatives in your discussion about your plans for transferring assets in the future. If you have issues of blended families, step siblings or multiple marriages, creating an estate plan through mediation will allow you to handle such situations and chalk out a plan that will minimize the chance of future family conflict and meet your financial goals. A mediator does not represent anyone, has no allegiance to any party, gives no advice, makes no decisions and has no conflicts of interest.