Frequently Asked Questions

A: The best place to store your signed estate planning documents is typically in a safe deposit box, as it offers protection from theft, fire, and other types of damage. However, to avoid complications after your death, it’s wise to name a joint holder, such as your executor or trustee, to ensure access to the box. If you prefer not to rely on a bank, you can keep your documents with your attorney, but this poses risks if your attorney’s firm closes. For ultimate security, some people use home safes or even air-tight plastic bags in their freezers, though these methods come with their own risks

A: Accessing a will stored in a safe deposit box after death can be straightforward if a joint holder is named, as they can retrieve it without delay. If no joint holder is listed, the only option is to petition the court for permission to open the box, which can be time-consuming and costly. This court process involves filing legal papers and potentially hiring an attorney, making it a less favorable route for most people.

A: While some people prefer to share their estate planning documents openly with family members, others choose to keep them private to avoid disputes. If your Will or trust divides assets unequally or contains sensitive information, it may be better not to share copies. However, if you have a transparent relationship with your family, sharing the documents with your children and executors can prevent confusion later. It's important to ensure that if you make any changes to your estate plan, everyone receives updated copies to avoid conflict over outdated documents.

A: You can give up to $19,000 per year (for 2025) to any individual without triggering gift taxes, and if you are married, this amount doubles to $38,000 per recipient (for 2025). Additionally, payments made directly for someone’s tuition or medical expenses are not subject to the annual exclusion. If you exceed the annual limit, the excess will count against your lifetime gift exemption, which is currently set at $13.99 million (for 2025). Keep in mind that gifts exceeding the annual limit must be reported to the IRS, and once the lifetime exemption is exhausted, any additional gifts are subject to gift taxes.

A: 529 accounts are highly effective tools for saving for educational expenses due to their tax-free growth and withdrawals when used for qualified educational costs. They offer flexibility, allowing you to contribute large sums (up to five years’ worth of gift exclusions in one year) without incurring gift tax, and they help reduce your taxable estate. However, unlike some other savings vehicles, 529 accounts don’t allow you to choose specific investments. Despite this limitation, they remain a powerful option for high net worth individuals looking to reduce estate tax liability while funding education.

A: Creating a trust for your children can provide significant advantages, including protecting assets from creditors, minimizing estate taxes, and ensuring that the funds are used in accordance with your wishes. Trusts can also allow for control over how and when your children receive their inheritance, providing protection from premature spending or financial mismanagement. By setting up a trust, you can ensure that your children benefit from your wealth in a way that aligns with your long-term goals and values.

A: The lifetime gift exemption allows you to give away up to $13.99 million (for 2025) over the course of your life without triggering gift or estate taxes. Gifts beyond the annual exclusion amount count toward this exemption. Once the exemption is used up, any additional gifts are subject to estate and gift taxes, which can be as high as 40%. Careful planning with an estate attorney can help you maximize your exemption and reduce the tax burden on your estate.

A: To make large gifts without incurring gift taxes, you can take advantage of the annual gift tax exclusion, which allows you to give up to $19,000 per recipient (for 2025) each year tax-free. For amounts exceeding this limit, you can use your lifetime gift exemption, which allows you to gift up to $13.99 million (for 2025) over your lifetime without paying taxes. If you’re planning to make significant gifts, consider structuring them through trusts or 529 accounts to maximize their benefits while minimizing tax consequences. Consulting with an estate planning attorney is recommended to ensure that your strategy aligns with your overall estate plan.