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Phone: 201-345-3018

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Estate planning for the not-as-wealthy

When planning an estate, most people automatically think of the very rich since the exemption for an estate tax is more than $5 million. However, an estate tax is not the only issue involved in estate planning. Most people, no matter their social status, need to make up a will through the use of either a lawyer or a financial adviser. However, the middle-class individual could also benefit from other areas of estate planning.

One of the considerations that may need consideration is the transfer of property after death. Several details of how the property transaction will happen can be complicated, although who will receive the property might be straightforward. In some cases, it's better to give away personal property before death. If this seems to be a challenge because of possible hurt feelings on the part of some family members, the giver can tell their family that their financial adviser made this recommendation.

Personal effects, such as jewelry, furniture or heirlooms, might need to go to a specific family member. A lawyer or adviser can guide their client in their decision-making process and bring up options that they might not have considered. Real estate brings up additional complications. Some people might decide to sell their property, increasing their income. This will affect their future financial plans. Those who receive real estate will probably need to pay a gift tax. In either case, skilled counsel can provide added direction. Clients should also plan for power of attorney prior to the actual need to transfer decision-making into someone else's hands.

Estate planning can be a complicated matter, especially for someone with several heirs or with a large estate. An attorney with experience in the field of estate planning might be able to advise clients on how to handle their will.

Source: Life Health Pro, "5 ways to help middle-class clients with estate planning", Tom Nawrocki, May 23, 2013

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