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What Can I Put In My Will

What can I give away in my will?

Property you own: personal bank account to household items to real estate owned by you alone or as a tenant-in-common.

Burial Instructions: you can leave valuable instructions in your will regarding your funeral, burial or cremation,

Guardian of your children: You can leave information regarding who you would like to be the guardian of your children in your will.

Some of your property might not be distributed through your will, either because there is already a separate contract that assigns or shares the ownership of this property with someone else.

What property is not distributed through a will?

Property held as Joint tenants: The most common forms of joint tenancy are homes and checking accounts. Be sure to check your property agreement before assuming you have joint ownership rights. It is easy to assume you are joints tenants, but your title might actually have you listed as tenants in common. If your interest in property is held as tenants in common, you can give generally bequest your interest in that property in your will. You will also want to check the title to your car, other financial accounts that you won jointly with another person.

Life insurance: you can distribute your life insurance proceeds through a will if your beneficiary is listed on your policy paying to your estate. Most people list a beneficiary or beneficiaries on their life insurance policy because those proceeds avoid probate.

Property held in trust: If you have any trusts accounts such as savings, bank trusts and living trusts, that property held in trust will distributed by the terms of the trust, not your will.

Community Property: For those of you who are married or domestic partners, you can only give away the property that is your separate property and one-half of the community property. Check our community property page to determine what property is your separate property and what is community property.

Should I be Worried about Federal Estate Taxes?

The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate."

Your gross estate includes the value of all property in which you had an interest at the time of death. Your gross estate also includes the following:

  • Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs;
  • The value of certain annuities payable to your estate or your heirs; and
  • The value of certain property you transferred within 3 years before your death.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate."

The allowable deductions used in determining your taxable estate include:

  • Funeral expenses paid out of your estate,
  • Debts you owed at the time of death (mortgage, health care expenses, and credit card debt)
  • The marital deduction (generally, the value of the property that passes from your estate to your surviving spouse),
  • The charitable deduction (generally, the value of the property that passes from your estate to the United States, any state, a political subdivision of a state, the District of Columbia, or to a qualifying charity for exclusively charitable purposes), and
  • The state death tax deduction (generally any estate, inheritance, legacy, or succession taxes paid as the result of the decedent's death to any state or the District of Columbia.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans.

If you think you may qualify for the federal estate tax and want to set up a trust to avoid it, we recommend you see an attorney who specialized in estate planning for wealthy individuals. This attorney should have at least ten years of estate planning experience and work with tax professionals .

The federal estate tax is really only meant to affect those who can afford to pay for specialized services and is not generally of concern to most Americans, however, if you are in the wealth bracket it applies to the our tax law system is set up to make it extremely difficult to avoid paying the tax. Since there are many creative lawyers and accountants, these rules often change frequently to keep people from avoiding paying the tax.

summerall law
Summerall Law, P.C. - Oakland Estate Planning Attorney
Located at 3873 Piedmont Avenue, Suite 8,
Oakland, CA 94611
Phone: (415) 944-9406
Local Phone: (415) 944-9406

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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