Major Importance of Estate Planning

As the president of Ziebold Law Group, Mark Ziebold offers various personalized planning solutions for his high net worth clientele. He obtained a BA in economics from Baylor University and a JD from Chapman University School of Law before advancing his studies in the same school to earn an LLM in taxation. Mark Ziebold specializes in taxation, probate law, and estate planning.

Estate planning is the arrangement of tasks during an individual's life for the efficient administration and distribution of assets in the event they become deceased. It also includes tax planning and ensuring that if challenges arise, that the wishes of the decedent are best defended. Here are some other major considerations that one plans for in estate planning.

First, it ensures the security of the inheritors. The primary feature of estate planning involves appointing beneficiaries for properties like a building or a stock portfolio. The court usually determines who obtains property in cases where an estate plan doesn't exist for a property; an incidence that may consume time and money.

Second, estate planning helps to protect the beneficiaries from substantial tax obligations. Whether income tax, Estate tax, Generation Skipping Transfer Taxes, or others, a well thought out estate plan will minimize those taxes for the beneficiaries.

Third, the purpose is to prevent a situation where beneficiaries may fight over the control or beneficial ownership of assets. This is likely to occur in blended family situations or situations where an heir is disinherited or receives less than other heirs.

Fourth, if a lawsuit springs up in the future, an estate plan may be structured to secure the assets from unprecedented creditors that bring litigation against the beneficiaries of the estate.

Lastly, other estate planning documents such as a power of attorney or a health care directive will help others to make decisions for people who are incapacitated or cannot make decisions for themselves. These types of documents are critical to ensure that your wishes are carried out and only in a comprehensive estate plan can these goals be met..

 

Wealth Preservation Strategies Enhance Estate Planning

Mark Ziebold, founder of the Ziebold Law Group, is a graduate from Baylor University in Texas with a degree in Economics. He is also an attorney specialized in taxation and estate planning after obtaining his JD and LLM (taxation) from the Chapman University of Law. Mark Ziebold is a certified asset protection planner and an accredited wealth preservation planner from the Wealth Preservation Institute.

Estate planning refers to the process of managing and preserving a person's wealth while alive, plus sharing said wealth after death with one's heirs or selected beneficiaries. Wealth preservation goes beyond protecting owners' wealth for themselves and their families; it entails maintaining the owner's income and assets, including their estates. However, estate planning differs from one person to another because many factors are considered before planning, including the owner's profile, goals, current circumstance, and time frame.

There are simple wealth preservation strategies that enhance estate planning, including trust planning, gifting, charitable giving strategies, and coordinating with financial advisers to implement principal protected investment strategies. Wealth preservation planners ensure that annual gifting tax exclusion is wholly incorporated into estate planning. They may also advise the need for alternative investments, an increase in the use of liquid assets, and buying annuities and bonds. Another strategy employed to preserve and pass along wealth to an offspring and their children is long-term life insurance.

The Five Different Types of Trust

The president of Ziebold Law Group, Attorney Mark Ziebold belongs to the elite group of California lawyers who specialize in the areas of taxation and estate planning, trust, and probate law. Attorney Mark Ziebold also serves as a private fiduciary on various types of trusts.

A trust is a legal means to allow a third party, called trustee, to manage assets on behalf of a beneficiary. A trust offers a wide range of options to manage the assets, especially when the maker wants to pass on the assets to his or her children or to shield the assets from taxes. Below are five different types of trusts among various types that are used in estate planning applications:

1. The credit-shelter trust, also known as a bypass trust, holds an amount of property passed by the decedent up to the estate tax exemption. The rest of the estate is administered pursuant to the remaining estate planning documents and this trust usually provides for the spouse for life and then passes the assets on to other heirs without estate taxes.

2. The generation-skipping trust or dynasty trust allows for the transfer of a substantial amount of assets free of estate tax and generation skipping transfer taxes to beneficiaries at least two generations younger. Typically, this type of trust provides ongoing benefits to grandchildren and more remote descendants for as long as the trust remains in effect.

3. The qualified personal residence trust (QPRT) removes the value of the family home or the vacation home from the estate at a discounted value, especially when such properties have the potential to increase in value over time.

4. The irrevocable life insurance trust (ILIT) removes life insurance policies from the taxable estate of the owner of the policy. When the policy is removed from the estate, the policy is owned by the trust and therefore the beneficiaries of the trust can benefit from the policy by actions taken from the Trustee of the ILIT. The proceeds from the life insurance can be used in a variety of ways to benefit the heirs or beneficiaries after the maker dies.

5. The qualified terminable interest property trust (QTIP) is preferred by people involved in divorces and re-marriages. Under the QTIP, the maker can direct his or her assets to particular relatives after the death of the surviving spouse but continue to benefit the surviving spouse for his or her life. The surviving spouse must receive all income from the trust while the specified beneficiaries receive the principal or the remainder of after the surviving spouse passes away.

The Difference Between Estate Tax and Inheritance Tax

The president of the Ziebold Law Group, Mark Ziebold is one of fewer than 100 attorneys in the state of California with specializations in state planning, trust, and probate law and taxation. Attorney Mark Ziebold is an expert in estate taxation and advises high-net-worth individuals about asset protection.

An estate tax is levied on property that is transferred after death. Most people do fall below the $11.58 million minimum (doubled for a married couple if their plan is properly structured) requirement to be subject to estate tax, but it can be a substantial loss (at the top marginal estate tax rate of 40% of each dollar over this threshold) for those who have assets in excess of that minimum. Typically, assets in an estate are taxed at their fair market value rather than the amount paid for them by the owner. Additional state taxes could also apply in addition to the federal estate tax as certain states have a state level estate tax.

An inheritance tax, on the other hand, is collected from people who receive an inheritance. It only applies in a handful of states, but some states have both an estate tax and an inheritance tax leading to a tax both from the grantor and the inheritor of the estate.

Avoiding Common Mistakes in Estate Planning

As president of Ziebold Law Group in California, Mark Ziebold focuses on estate planning, tax planning, and related areas. Mark Ziebold has helped numerous clients to develop a strategy for distributing their assets after death.

Estate planning is a complicated process, and a person can easily make costly mistakes if he or she lacks the guidance of a qualified professional. For example, may people make an estate plan and then never look at it again. This can mean that when the person does pass away and the document becomes active, it may not reflect the most recent wishes of the decedent. It may also be based on superseded laws and procedures, which can interfere with the plan's execution and impact the beneficiaries in negative ways.

Experts recommend that estate owners review their estate plans at least every five years or when major changes occur in the tax laws. This allows them to change beneficiary designations as necessary and ensure that asset ownership meets current needs. A divorce or remarriage, for example, may cause an estate owner to need to change certain joint asset arrangements or power of attorney designations and in many states a divorce will automatically void some or all of the estate planning documents in place.

Estate owners may also make a point of discussing the plan with heirs. While some clients wish to keep things completely private and hidden from children and heirs, this creates the possibility of unrealized expectations in the children which can cause conflict after the client's death. Not discussing things with heirs and children can lead to emotional and even costly misunderstandings, or to a plan that fails to meet the needs and preferences of the parties involved, which costs everyone more in the long run.

Finally, it is important for all estate owners to keep detailed records of their assets and how they will be distributed. This step also gives the estate owner the opportunity to check the tax implications of each distribution, a potentially complicated process when different accounts, trusts, and other vehicles are involved. Doing so becomes much easier when an estate planning expert is involved, as he or she can provide explanations every step of the way.

Pass Through Strategies for Reducing Taxes as a Small Business Owner

Based in Orange County, Mark Ziebold leads a law firm that offers knowledgeable counsel in areas such as estate planning and corporate and partnership law. Among Mark Ziebold’s areas of extensive experience is in enabling small businesses to save money through avoiding the overpayment of income taxes.

One aspect of these tax minimization strategies has to do with the structuring of the business itself, with S-corporations or pass-through entities offering distinct advantages. In particular, the S-corporation allows a significant percentage of earnings to pass through the business and be distributed as distributions. Both the S-Corporation and partnership taxed entities such as a multiple member partnership also qualify for the new Section 199A decuction for qualified business income (subject to certain limitations depending on the type of business). 

This reduces exposure to the Federal Insurance Contributions Act (FICA), which requires that employers withhold Social Security and Medicare tax from wages paid to employees. Setting up payment through dividends decreases FICA-eligible wages, as the employer portion of FICA taxes is paid only on the income taken as salary.

Other strategies for reducing taxes through S-corporations, LLCs, and partnerships include charitable contributions. With the business contribution passed through to the business owner, the deduction can be claimed on the individual's tax return.

An Overview of Probate Law

Mark Ziebold is an Irvine, California-based attorney who has spent the last seven years as president of Ziebold Law Group, P.C. He also serves as a partner at Million Voorhees Ziebold, LLP. As an attorney, Mark Ziebold focuses on estate planning and probate law.

After an individual passes away, his or her estate is not immediately distributed to the decedent's heirs. Instead, if no trust exists to administer the estate, the will causes the estate to be subjected to a legal process known as probate. During probate proceedings, a court will determine whether or not the will is valid. Additional elements of probate including making an inventory of the author’s assets and property, appraising these items, paying off any relevant debts and taxes, and subsequently distributing all remaining assets as the will dictates. In lieu of a will, assets are distributed according to state law.

Probate can prove to be a lengthy and sometimes contentious process, particularly if there is no valid will in place. Furthermore, finances and assets named in a will may have to be used to cover court and legal fees, rather than being given to the individuals or organizations named in the will. Fortunately, most states provide various methods of avoiding probate processes, most notably joint tenancy filings and living trusts. To learn more about avoiding probate processes, contact an attorney experienced in probate and estate planning law.