We amass wealth (and debts) of any amount, throughout our lifetime. When we either become unable to make financial decisions, or when we die, this wealth (and debt) becomes our “Estate”.
Estate planning is the process of planning for that time when you can no longer manage your (own) wealth – either due to incapacity or death. The purpose of this process is to eliminate uncertainties and to maximize the value of the estate by reducing taxes and other expenses.
To eliminate many of the uncertainties surrounding our wealth and death, we prepare a Will. However, a Will, no matter where prepared and executed, is not sufficient to plan for your family’s wealth, if you maintain assets of any kind in the U.S. Additional simple estate planning will save money, effort and time by avoiding the following:
Publicizing a list of your assets. Whether you die with a Will or without, a detailed list of your assets, including their location and account numbers, must be filed with the local U.S. Court. This information is open to the public, and may be viewed by anyone.
Probate fees collected by a U.S. Court. An average of 5%-15% of the value of your assets located in the U.S. on the day that you die, is paid to a U.S. Court, if you either only have a Will or die without a Will. You will not have to pay this fee if you do additional estate planning beyond a Will.
An administrative, bureaucratic process called “˜probate’ which typically lasts an average of 10 months and demands extensive paperwork. Estate planning can shorten this process to a matter of days and require only a fax and a couple of signatures. The process can be completed overseas. It will make your family’s resources available immediately for your loved ones as needed, upon your death.
Starting a probate process in different states, depending on where your assets are located. For example, if you own assets in 3 U.S. states, you may need to open a probate file in each of those states.
U.S. Federal and State Estate Taxes. There is no Israeli Inheritance or Estate Tax. The current threshold that is exempt from U.S. Estate Taxes is very high. But anyone who owns more than the exemption amount, can be taxed at a rate of 40% of the value of the asset on the date of death. This tax is on any assets owned on the date of death – no matter where located, meaning even assets held in Israel. A Will does not exempt any assets from this tax, but additional estate planning can remove assets from the application of the tax.
For more information, see “Do I need an estate planner?”
How does the process work?
Osher Felicia M. Haleli, Esquire advises anyone who has assets of any kind that are located in the U.S., or clients who are high net worth, and hold U.S. citizenship or green cards, though they might not own anything located in the U.S., to meet with her for a consultation. Such assets may be bank accounts, investments, mutual funds, real estate, business interests, retirement accounts, IRAs and the like. As decisions need to be made throughout this process that are sensitive and maybe complex, preparation is required.
In preparation for the consult, Attorney Haleli requests that her clients prepare a list of their assets worldwide, so that they can thoroughly review it during the meeting. For more details about the need for this list and how to prepare it, see the article “Wealth needs a Seder too”.
During the consultation, Attorney Haleli reviews the client’s assets as a basis for discussing what they want to happen with their assets upon their death – who should inherit? Who shouldn’t? Who should manage the assets and then distribute them according to the client’s plan? Do any of the beneficiaries need financial monitoring or help of any kind? What do you want that help to look like?
Have you provided for minor children adequately and appropriately? Who should manage your assets should you become incapable of doing so? Do you have a plan in mind? Have you thought about what you want your wealth to fund – education, wedding, home purchase?
With 25 years experience, Osher Felicia Haleli brings her skills as a listener and advisor to these consults. Together, the client and Attorney Haleli creatively formulate a plan for your family’s wealth that will save you money, time and energy.