heirs

Why Star Wars is Actually About Estate Planning

Why Star Wars is Actually About Estate Planning

Today is May 4th, which means only one thing…

It’s Star Wars Day (as in, “May the Fourth be with you”).

Yes, just three days after Justin Timberlake's annual takeover of the Internet, your Facebook news feeds and Twitter timelines are probably now overflowing with Star Wars memes.

It's a tradition that has come to feel like an overdone Dad Joke™, though like many Dad Jokes™, it still makes your mouth turn up slightly at one corner against your wishes.

But this year I want to add something unique to the discourse.

Something gripping.

Something provocative…

I am going to explain how Star Wars is actually a story about estate planning.

It is an incredibly ambitious undertaking, I know. No scholar has attempted it before. But in the words of a tiny green space goblin named Yoda, “Do, or do not. There is no try.”

A Few Introductory Notes

As a Star Wars fan and as an attorney, I am obligated to make several disclaimers.

First and foremost, consider this your one and only >>spoiler warning<<.

Can I Write My Own Will?

Can I Write My Own Will?

Most people know the phrase "Do It Yourself" or “DIY.”

For me, “Do It Yourself” calls to mind weekend trips to Home Depot and learning how to do something new instead of paying someone else to do it.

Also Pinterest. It calls to mind Pinterest.

That’s part of what makes DIY projects so great: Who doesn’t love saving money and feeling proud of something they did themselves?

But there is a limit to what you can do yourself, right?

I can do some home improvement stuff myself, like painting walls or breaking the nice faucet on the kitchen sink.

However, things would get really dicey if I tried to act as my own plumber, excavator, or electrician without proper training and experience.

Doing those tasks incorrectly could have disastrous consequences.

The same is true of "Do It Yourself" estate planning:

A poorly designed estate plan can lead to massive probate expenses, family infighting (and ruined relationships), having your legal documents rejected, and much, much more.

The Dangers of “Do It Yourself” Estate Planning

If you aren’t familiar with “Do It Yourself” estate planning, here’s how the process usually goes:

IRS Increases 2020 Estate Tax Exemption

IRS Increases 2020 Estate Tax Exemption

The Internal Revenue Service (IRS) just announced that the estate and gift tax exemption for 2020 is increasing to $11.58 million per person — up from $11.40 million in 2019.

If you are like most people, you are probably asking, “What does that actually mean?”

What is the Estate & Gift Tax Exemption?

As I explained in the summary of estate and gift taxes I wrote last year:

The estate tax is a federal tax imposed on estates over a certain value. That “certain value” is known as the “estate tax exemption” or “combined estate and gift tax exemption” or “unified credit” or a dozen other names.

The main thing to know is this: if an estate is worth more than the estate tax exemption amount, the value over the exemption will be taxed. If the estate is worth less than the exemption amount, no tax liability.

So the increase announced yesterday by the IRS means that if an estate is created (i.e., if a person dies) in 2020, there will be no estate tax imposed if the estate is worth less than $11.58 million. And thanks to estate tax portability, a married couple can now shield double that amount, $23.16 million, from estate taxes in 2020.

Do I Need to Pay Inheritance Taxes?

Do I Need to Pay Inheritance Taxes?

Do you want to pay less in taxes?

Of course you do. I would be worried if you wanted to pay more in taxes...

The question is HOW you can pay less in taxes. Here's one way: estate planning.

A good estate plan can help you minimize your tax burden. Specifically, estate planning can impact (1) income taxes, (2) inheritance taxes, and (3) estate taxes.

Most people are familiar with income taxes. However, they are less familiar with estate taxes; and many people have no idea that inheritance taxes even exist. So it comes as no surprise that one of the most common questions I get from prospective clients is:

"Do I need to pay inheritance taxes?"

It is a good question and is usually accompanied by a number of other, related questions:

  • What, exactly, is an inheritance tax?

  • Is an inheritance tax the same thing as an estate tax?

  • How can I avoid having to pay an inheritance tax?

This blog post will answer these questions, give you a better understanding of the difference between inheritance taxes and estate taxes, and explain how those laws operate in Oklahoma.

What's the Difference Between a Will and a Trust?

What's the Difference Between a Will and a Trust?

Estate planning is a very broad (and often confusing) topic.

There are countless estate planning options available, and the “best” estate planning option for you may depend on hundreds of different factors.

At bottom, though, estate planning can be boiled down to a simple definition:

An estate plan ensures that the right people are able to care for your SELF in the event you become incapacitated and that the right people are able to get your STUFF after your death.

The second part of that equation — what happens to your stuff, i.e., your assets — is what most people have in mind when they think about estate planning.

And when it comes to deciding what happens to your stuff, there are two main options:

  • a Last Will and Testament

  • a Living Trust

While there are other estate planning options that can control what happens to your assets after your death, I will save those topics for another day.

For now, let’s focus on the main differences between Wills vs. Trusts.

Why Do You Need an Estate Plan?

If you died today, what would you want to happen to your assets?