While the nation is still debating health care reform, an even bigger problem is facing Americans. Seventy-eight percent of Americans own a home and fifty-five percent of Americans have small children living at home, yet less than half of the country has even signed a will, let alone any other document that composes a complete inheritance plan. Some of us may need long term health care and some of us may not, but the only two certainties in life are death and taxes. While we at Wild Felice & Pardo can’t help you live forever, we’re very good at limiting the amount of tax your family has to pay after you’re gone.
Did you know that the property tax threshold could be as high as $1 million in 2011 and the property tax could be as high as 55%? $1 million seems like a lot of money but when you consider that the amount of life insurance you have is added to your estate immediately upon death, $1 million can quickly sneak up on you. You work all your life you get paid. The government taxes wages somewhere between 20 and 35 percent. Then, after you leave, the government takes an additional 45 to 55 percent of what you left behind. Nearly 80 percent of what you earn in your life will go straight to taxes unless you take the time to sit down with an attorney and put together your real estate plan.
There are five components to a basic housing plan:
Will: A legal statement whereby a person, the heir, names one or more persons to manage his property and arrange for the transfer of his property at the time of his death.
Life Will: A written document stating a person’s wishes regarding life support or other medical care under certain circumstances, usually when death is imminent
Power of attorney: A written authorization to an agent to perform certain actions on behalf of the principal. It can be granted as a general or limited power.
Health care substitute: An adult appointed to make health care decisions for you when you cannot make them yourself.
HIPAA designation: A written document that allows a designated individual to have access to your medical records.
Apart from that, there are also several trusts and other products for further control and reduction of property taxes. If you have a spouse, children, own a home, or want to leave an inheritance of any kind, you will need to talk to an attorney about obtaining a will and other estate planning documents. It’s very important that you don’t put this off any longer. None of us can control how much time we have left, but we can control how loved ones are cared for when the time comes.