The Swier Law Firm Estate Planning and Probate Law FAQs

The Swier Law Firm Estate Planning and Probate Law FAQs

 

Have questions? We have answers! Our South Dakota attorneys answer the questions they hear most often from clients just like you.

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  • South Dakota Estate Planning - What Gifts Are Not Taxable?

    There is no limit to the amount you can give to your spouse, if you are both U.S. citizens. However, if you are a U.S. citizen but your spouse is not, you can give up to $152,000 to your spouse in 2019. Other common non-taxable gifts are:

    • Tuition costs you pay for another person have no limit, as long as you pay the institution directly.
    • Healthcare costs you pay for another person have no limit, as long as you pay the hospital or medical professional directly.
    • Charitable contributions are also limitless, as long as the charity qualifies.

    Do You Need To Speak With A Lawyer About Estate Planning?

    If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

  • South Dakota Estate Planning - What Is The Annual Gift Tax Exclusion?

    You can give away up to $15,000 per year, per beneficiary, with no gift tax consequences to the recipient or yourself. This strategy can be as easy as writing a check to each of your loved ones during the holidays. The assets you give away using the annual gift tax exclusion do not count toward the lifetime exemption.

    Do You Need To Speak With A Lawyer About Estate Planning?

    If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

  • South Dakota Estate Planning - What Is Lifetime Gift Planning?

    Lifetime gift tax planning allows you to give assets to loved ones, without paying gift taxes now or estate taxes later. Years ago, the federal government found that taxpayers were trying to avoid estate taxes, by giving away some of their property while still alive. As the donors saw their loved ones enjoying the gifts, the IRS saw the taxpayers avoiding or reducing estate taxes on these gifted assets at the death.

    As a result, the gift tax was enacted to keep people from avoiding the estate tax. The basic concept is - when you give someone an asset that exceeds a permitted amount, you (the donor) must pay the IRS for that privilege, in the form of a gift tax.

    If you are trying to use the lifetime wealth transfers to lower the total value of your estate and avoid or reduce estate taxes, here are three things you need to know:

    • The annual gift tax exclusion is $15,000 in 2019.
    • The lifetime estate and gift tax exclusion is $11.4 million in 2019.
    • Some gifts are not subject to the gift tax at all.

    Do You Need To Speak With A Lawyer About Estate Planning?

    If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

  • South Dakota Estate Planning - What Are The Lifetime Estate And Gift Tax Exemptions?

    Gifts exceeding the annual gift tax exclusion can fall under the lifetime estate and gift tax exemption, but you must file a timely gift tax return. For example, if one of your children is having financial issues, you should first maximize your annual exclusion and then apply gift amounts over that limit against the lifetime exemption.

    The lifetime exemption is $11.4 million for 2019. Before the Tax Cuts and Jobs Act (TCJA), the limit was $5.49 million in 2017. Unless made “permanent,” the current exemption amount will expire at the end of 2025 and the exemption could go back to the pre-TCJA limit.

    The IRS combines the estate and gift tax exemption for a total exemption of $11.4 million. In other words, if you do not use any of the gift tax exemption while you are alive and you die in 2019, your estate will have the full $11.4 million estate tax exemption. If you use $4 million of the gift tax exemption while you are alive and you die in 2019, your estate will have a $7.4 estate tax exemption remaining. In this way, the federal estate and gift tax exemption is considered to be a “unified” tax.

    Do You Need To Speak With A Lawyer About Estate Planning?

    If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

  • How can I protect my children's assets from a future South Dakota divorce?

    When clients set up generational wealth to pass directly to their heirs, and those assets are commingled with spousal assets or used to buy marital property, they may become fair game in later divorce proceedings.

    Solution: Explore Dynasty Trusts

    Families do not have to rely on prenuptial agreements to protect assets. A less emotionally charged way to shelter generational wealth is to plan its transfer using a dynasty trust with a corporate fiduciary. This way, assets intended for multigenerational use are not lost in a divorce.

    Corporate fiduciaries often serve as objective and experienced trustees to help protect trust assets for the benefit of successive generations.

    A collaborative team of seasoned experts can help your clients make enduring action plans. These plans can protect family wealth and make sure its transfer does not rely on the success of any current or future marriage.

  • When should I have a joint trust with my spouse?

    Married couples often consider themselves one unit with their spouse. It doesn’t seem to make sense that separate revocable trusts would be set up as part of an estate plan. But what most people don’t really understand or want to consider is that the real benefit to having a revocable trust happens after death. After the death of the first spouse one spouse still remains. There is no longer a marital unit and any trusts you have must reflect that.

    A portion of the assets that are attributed to the deceased spouse must become irrevocable and a portion must stay revocable. This is where things get confusing, time consuming, and potentially very costly if the assets were not split into separate trusts while both spouses were alive. Ultimately, the surviving spouse will be stuck dealing with the mess and cost.

  • What are the disadvantages of my spouse and I have separate revocable trusts?

    Here are two disadvantages of having separate revocable trusts:

    • With separate revocable trusts, each spouse will have their own trust and would essentially be responsible for the management of their own trust.  But spouses can share this responsibility by making each other co-trustees of their respective trusts.
    • Formation and proper funding of separate revocable trusts require slightly more upfront cost and a bit more work to fund separately.

    Do You Need To Speak With A Lawyer About Estate Planning?

    If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

  • What Does Will Contest Mean In Estate Planning?

    What Does Will Contest Mean In Estate Planning?

    This does not determine who has the best Will, it is a process through which someone files a formal objection to a Will.  The objection could be for any number of reasons, but the objection must be filed with and heard by the probate court of the county where probate of the Will is taking place.

  • What Do Wills Mean In Estate Planning?

    What Do Wills Mean In Estate Planning?

    A written document that contains instructions for the disposal of assets at a person’s death.  This is filed and enforced through a probate process, sometimes involving the probate court.  Laws vary by state.
     

    Holographic Will

    A will that is partially or fully handwritten.  Not all states recognize holographic wills.
     

    Pour-over Will

    Used together with a revocable trust to “pour” any assets that were not in a decedent’s trust at the time of death over to the trust.

  • What Does Unified Credit, Estate Tax Exemption, Combined Estate and Gift Tax Exemption Mean In Estate Planning?

    What Does Unified Credit, Estate Tax Exemption, Combined Estate and Gift Tax Exemption Mean In Estate Planning?

    The amount each person is allowed to deduct from any federal estate tax that may be due after death or for gifts given during lifetime (above the annual gift tax exclusion amount).  In 2019 this amount is $11.4 Million.  Current rough calculations of American assets show that more than 99% will never pay an estate tax at these levels, especially with estate tax portability.
     

    What Is Estate Tax Portability?

    Estate Tax Portability can be used by a married couple to shield $22.8 Million dollars from federal estate and gift tax.