Preparing to transfer your assets is an important task. As you know, dividing your assets between you and your spouse/partner is an important step in the estate planning process if you are to obtain the maximum probate avoidance and estate tax savings from your Trusts.

There are numerous factors you should consider when dividing your assets between your respective Trusts, including income tax issues, balancing the Trusts for income and estate tax purposes, as well as for creditor protection and effective division of your assets in the event of a subsequent divorce or separation.

Under the current law, each of you can transfer up to Read More

Estate Planning Reminder

Under current law, each of you can transfer up to $2,000,000 in assets free of estate taxes at death (reduced by any taxable gifts made during your lifetimes). This amount will be changing over the next few years as follows:

2007 and 2008 — $2,000,000
2009 — $3,500,000
2010 — repeal for one year
2011 — $1,000,000

Generally, we suggest equalizing the ownership of your assets between your two trusts so that, if possible, each of your Trusts will own a minimum of $2,000,000 in assets at your death (based on the current law). This will enable each of you to take advantage of the $2,000,000 tax exempt amount, regardless of which of you may be the first to die. In Community Property states assets are considered split between spouses, and therefore, one trust may only be needed.

Although it is not possible to change the ownership of IRAs and retirement plans, it is generally preferable to name one’s spouse as the primary beneficiary and then to name one’s Trust as contingent beneficiary. This can be done through beneficiary designation forms that we provide.

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The year 2006 was a good one for equity investors around the world as stock prices rose in 46 of the 50 countries whose equity market returns are reported by MSCI. Among these, only Israel, Jordan, Thailand, and Turkey saw their local stock market indexes slump for the year. Total return for US stocks was 15.32% according to MSCI, placing it next-to-last among 23 developed markets (in dollar terms) and 42nd out of 50 countries in all. There were 36 markets with a total return greater than 20% (in dollar terms), and 19 had a total return greater than 40%. Nine of the top ten were emerging markets.