Sign North Carolina Banking Last Will And Testament Myself

Industry sign banking north carolina last will and testament myself

good afternoon my name is Paula Yoko Kubota Simon estate planning attorney with Stevenson law in Cary North Carolina and I wanted to take a moment to kind of go over a common question or misconception I guess Rather's is more appropriate from clients that I meet with in my office I do comprehensive estate planning which includes wills and trusts it includes business planning special needs planning and asset protection planning and one thing I hear often is people come in and they say I need a will so that the government won't get my money so I wanted to take a moment to kind of discuss that and flush that out so when we talk about the government getting your money it can come in a couple different ways so normally that's going to be in the form of taxes so assets being taxed or you paying capital gains tax and those sort of things or something that your family can anticipates when they receive your assets f you pass the other may entail paying fees to the government in the form of the probe a fee so let's take a couple minutes and kind of flush that out so first off the taxes that you may encounter that your family may encounter are going to be estate taxes or capital gains tax so estate taxes are purely on the federal level in North Carolina is North Carolina has repealed their estate tax several years ago so there's no state level estate tax any longer there hasn't been for about four years so as far as federal estate tax we're really only talking about like a point zero one percent problem the reason I say that is because most people are never going after word about a state tax the current federal exemption amount and what I mean by exemption is that every dollar that passes below a certain threshold will pass without being taxed without being subject to estate tax so the current exemption amount in the United States is 5.49 million dollars for 2017 so that's per person per individual so that amount is doubled for married couples so every married couple the surviving spouse will have a lifetime unlimited exemption for receiving gifts and assets by way of a state succession from one spouse to the other so whether it's a lifetime gift transferring assets to the other spouse or by virtue of one of the spouse dying the surviving spouse will receive those assets without them being subjected to estate tax so we're really talking about when the second spouse dies at that point the first really 11 million dollars it's about ten point nine eight million dollars is passing tax free to your beneficiaries so you're really only being taxed on every dollar above that so you'd have to have ten point nine eight and one dollar and every dollar at that point is taxed at forty cents on the dollar for forty percent so for the most part people don't have to worry about that but more importantly wills don't have any effect on that so the reason for that is taxes are calculated on what's called the taxable estate taxable estate is anything that you own or any value that you have on the date of your death and that may include personal property real property I raised 401ks for 3 b's life insurance that's owned by you and your name and things like that so it's really calculating everything that you own or everything that its value is calculated on your life well your will has no impact on that the will is going to direct your probate assets and assets that are considered probate assets are going to consider are going to be include anything you own individually on the date of your death so it's really going to be personal property it's really going to be bank accounts brokerage accounts vehicles home furnishings of personal effects and stuff like that so what a will does is X the distribution of those assets after you pass and it's only effective upon passing upon death so it does not however take assets out of your taxable estate so whether you're subject to estate tax or not is not going to be changed by having it will or not so the other tacker talk about is capital gains tax which is going to be essentially tax on profits so things that are held that have appreciated so it could be stock the e bone for 10 20 30 years and say coca-cola so if you have a cost basis in your stocks at say seventy dollars a share and I'm just spitballing you don't know what the current trading value of coca-cola stock is but say you know for example purposes you have coca-cola stock that you bought at seventy dollars a share twenty years ago well over the last twenty years it's double in value so your your tax basis is seventy dollars oh if it's worth a hundred forty dollars per share now you have a seventy dollar gain on every share so if you were to sell it you're gonna have to pay a long term capital gains tax on that currently it's around twenty three percent and you add to that the state level which is about five percent so that's capital gains tax generally so when you pass appreciated assets by virtue of your death your family currently under the current tax codes takes that on a stepped-up basis now let's get more definitions down stepped-up basis means that they're going to have it a cost basis at the current fair market value when they receive the property so if it's worth one hundred forty dollars today that's their new tax basis if you were to pass today so if they were turn around and sell it they would have zero tax base or zeros tax liability because there's no gain so by virtue of you know transferring property member to of death triggers that step up and basis so if you were to gift those assets during your lifetime your beneficiary whoever you're giving it to takes that property at your cost basis so after you pass if they were to sell it I think if you gifted it to them the day before you passed they would have to pay capital gains on that seventy dollar gained a seventy dollar profit so those are the two types of taxes that we normally deal with neither of which are going to be really impacted by will so whether you have a will or not people are still going to receive your property after you pass this a matter of who and how so if you don't have a will the state's default rules are going to control who your beneficiaries are how much they're supposed to get and then what form so what it will really does is it takes that decision or those rules out of the state's hands and makes them your old rules who you make your own rules and you can decide who gets your property how and in what amounts so wills don't have any impact on taxes really at all so state tax one is really not going to be a problem that a lot of people are gonna have to deal with to begin with but a will will not have any impact on the state tax the the other capital gains tax a will is also not going to have any impact on it may facilitate a step-up in basis by virtue of directing a transfer of property at death but most people if that's the case are not going to paint texts anyway if they're receiving property beber to death so then you know now with taxes out of the way the government's not getting your money through taxes then we talk about probate fees so whether you're whether you have a will or no will your estate is processed through the clerk of court in the county where you resided and had every intention to root tubers reside on the date of your death so normal it's going to be where your your permanent residences where your home is so I live in apex my offices and carry my domicile is Wake County so if I word pass wake county would have exclusive jurisdiction over my estate so if you don't have a will your status still processed by the clerk it's just by the state's rules not yours if you do have a will you enter what's called or your state enters what's called probate and that's the process of settling your estate according to your rules as set out in your will so in that respect whether you have a will or not the same process really applies as a matter whose rules are controlling so during that process the clerk is entitled to a probate fee of point four percent personal property assets in the estate so if you were to pass away with 1.5 million dollar brokerage account and that was subject to probate and had to go through the court process the clerk would be entitled to a six thousand dollar probe a fee so that is an expenses paid from your state it's not something that's individually incurred by your family or by your beneficiaries themselves it's essentially taking it off the top from the proceeds from your state that they would have otherwise realized so that is a very real cost and that applies across the board it's a minimum of fifteen dollars and a maximum of six thousand dollars so again to max out the probate fees you'd have to have 1.5 million dollars in probate assets so again a will is not going to impact that so if you have a will or not that fee is still going to be doing owing it's just a matter of controlling you know who get your assets on the back end where the proceeds go so this conception that it will will avoid you know having your money go to the government is is mistaken the very last way that's a non tax non fee way of the government getting your property is if you just simply have no beneficiaries if there's no one left in your and or family and you haven't designated a charity or a church or some other worthy endeavor or even friends neighbors co-workers however you be necessary if you don't have a contingent remainder beneficiary designated in your will then the sheets law may apply we're essentially your your assets are surrendered to the state and they can use them really however they deem necessary so that's usually again that going to be the case most people even if they don't have a will are going to have heirs that law which are people who are going to take by virtue of their relationship to you usually they're going to be blood relatives whether it be parents or grandparents or siblings you know children grandchildren that sort of thing so that's a very remote possibility but you know to kind of circle back Will's may prevent a sheets from happening but they're not going to have any impact on whether a probably if he is doing owing or whether the government is going to take any sort of taxes from your property so the way to avoid those sorts of you know fees associated with the probate process is just avoiding probate so the way we do that is we use either non probate designations so transfer on death payable on death joint tenant with right of survivorship or we use trusts to move your probate assets into a non probate designation so in that sense the trust totally bypasses probate so you can save that fee so while the will to avoid fees is misguided if your intention is to deprive the court of a probate fee the only way to do that is to avoid probate so the best way to do that is to get the ball rolling you know so to speak and set up a meeting with a lawyer to discuss your options and see what's in your best interest as far as planning is concerned but you can't do that unless you take that first step it's kind of like playing a lottery if you don't play you can't win so again my name is Paul yoga bite us i'm going to stay planning Ernie in Cary North Carolina and I help people through these issues whatever their wishes or fears maybe I help them resolve it through a legal planning essentially not just wills not distrust but overall comprehensive legal planning so if you're interested in learning more you can visit my website WWE a state planning calm or give me a call 919 858 7008 or an email PA y at stevenson hyphen law com