          
                          THE HIGH COSTS OF DYING
          
               It is universally recognized that everyone dies
          someday.  Therefore, every individual is permitted to
          plan for an orderly transfer of his or her assets to a
          spouse, child(ren), and/or other loved ones.  In
          addition, depending upon your success during life, upon
          death very substantial estate and inheritance taxes may
          be levied upon your estate.  It is within the context
          of valid estate planning that ancillary lawsuit and
          asset protection is available.  No court will ever deny
          a person the right to provided for their estate or to
          take advantage of the estate tax allowances available
          through trusts and other similar devices.
          
          Estate Tax Fundamentals
               Every dollar left in an estate is subject to a
          unified estate and gift tax.  However, to eliminate the
          burden of taxation from "small" estates, congress has
          given every individual two loopholes: first, any
          individual may give any other person $10,000 per year
          estate/gift tax free and second, each person is given a
          lifetime estate/gift tax credit that is the rough
          equivalent of a $600,000 estate.  In addition, a
          surviving spouse may inherit any amount from his/her
          spouse without paying tax until the death of the
          surviving spouse.  To reduce the taxes ultimately
          attributable to one's estate, two techniques are
          usually used.  Special types of trusts (the A-B and A-
          b/C trusts) are created that permit half of the estate
          to bypass the surviving spouse, thus creating a total
          exemption of about $1,200,000 from estate/gift taxes.
          For larger estates, the most effective technique is to
          give, over time, a large portion of the value of the
          estate to its intended heirs.  A major objection to
          this technique is that it gives up control of the
          assets before the testator has given up the ghost.
          However, using this technique, a married couple can
          each give $10,000 per person per year, and using
          conduits such as other relative, this amount may be
          multiplied and the process accelerated.
          
          Avoiding Probate
               While you can't avoid dying you can avoid the high
          costs of probate.  There has never been a will written
          that avoids probate.  Probate costs include attorney
          and accountancy fees.  To avoid probate many improperly
          use joint tenancy with the unwanted results described
          above.  To properly avoid these costs you may utilize a
          fully funded revocable trust, also known as a "living
          trust."  The costs of probate for an estate that
          exceeds the lifetime estate/gift tax credit may easily
          exceed $10,000.  Moreover, probate means delays in
          transferring control of the assets and publicity
          regarding the details of the decedent's affairs.  Using
          a living trust, you avoid these problems because you
          have pre-positioned your assets to permit a seamless
          transfer of control upon your death.  While the Last
          Will and Testament will be probated it will essentially
          show no assets passing under its terms.  For the twin
          reasons described above, costs and control, the use of
          the living trust is not only permissible but encouraged
          by the law and the courts.
          
               For married couples, forming two funded revocable
          living trusts is a good way to protect assets if one
          spouse is more vulnerable to claims than the other.
          Statutes in several states now provide that each spouse
          is entitled to hold his or her own property.  For
          federal income tax purposes, the trust creators are
          treated as the trust property owners and no separate
          tax return for the trust need be filed.
          
          
