|
I want
to share some information with you about the cost of immortality.
Immortality, in this case, means we leave something behind
that makes our descendants recall our names with fondness,
if not absolute ecstasy. This "something" could be money,
a good name, land, or some other key item. Where you leave
this legacy is important, and how you document this leftover
from your plate of life is also important.
The magazine
blip that fostered this topic led me to a suggested website,
where I discovered the importance of the state we live in
when we leave this world.* We might leave in a state of panic
or peace, but if we live in the states of New Jersey, Maryland,
or Nebraska, we currently leave our descendants with a double-whammy
hit of both estate AND inheritance taxes.
What does
this mean? The website, CCH
Financial Planning Toolkit, helps with an explanation
on taxes, retirement planning, and estate planning, among
other topics. The changes in federal estate taxes, otherwise
known as the "death tax," are clearly explained:
"?The
substantial changes to the federal estate tax laws enacted
in 2001 under the Economic Growth and Tax Relief Reconciliation
Act (EGTRRA) include the gradual phase-out of the state death
tax credit. This means that states with only a pick-up tax
in place will entirely lose their estate tax revenues unless
additional state estate taxes are enacted (which many have
already done)?the billions of dollars of associated lost state
revenues will have to be made up somewhere. (Translation:
look for some form of higher state taxes imposed to make up
the shortfall.)"
Inheritance
taxes are slippery, also, as your beneficiaries count their
inherited financial blessings or curses through various factors.
These categories include their distance from you in the family
lineage, time of death, and - once again - the place of death.
While this sounds like a perfect scenario for an attorney,
a financial planner might help you through most of the legwork.
The problem, however, is that these laws are currently - and
frustratingly - fluid. In other words, you might need to check
your state laws every year for the upcoming decade to make
sure your estate is going where you want it to go after you're
gone. In the long run, a tax or estate attorney might not
hurt your cause.
Of course,
the size of your estate determines whether you view these
laws as frustrating or as "who cares?" After all, we most
likely won't have a clue what happens to our worldly possessions
when we kiss this life goodbye. But, if we worked hard to
accumulate a small bling-bling, then we have some sort of
self-discipline thing going on. In this case, we'll most likely
want to control what happens after we leave.
On the
other hand, if we have next-to-nothing saved and little in
the way of possessions, the path home seems pretty clear-cut
and simple, right? Don't fool yourself. Our descendants will
probably face probate and other estate settlement costs, even
if we leave little for them to drool over. Additionally, we
pass on the cost of our funeral if we don't do the pre-funeral
arrangement thing. For probate and other costs, see
the CHH site and take this information to your financial advisor
or attorney for clarification if needed. For the burial problem,
I'll give you some internal advice. I discovered this information
while searching for distant (read: deceased) ancestors on
a recent vacation.
While
most of you probably don't spend your free time poking around
graveyards (I have a penchant for history, weeping angel sculptures,
and genealogy), your perspective about your funeral might
change if you happen upon some undisclosed family funeral
plots. Suddenly, you might envision a headstone for yourself,
rather than sit with that long-standing notion that you want
your ashes scattered over Lake Whatever. You might spend a
few hours browsing through epitaphs to find one that makes
your shadow seem as substantial as your life. But, you might
ask, "How do I go about finding an unknown inherited cemetery
plot?" And, I respond, "Here's two hints:"
- Spend
a little time with ancestors who died since 1800, when public
cemeteries became the place to spend eternity. Uncover full
names, dates of birth and death, where they died, and where
they were buried. The documents needed for proof of lineage
include wills, deeds, or any other paperwork that shows
the person's name and includes the names of either their
parents or their children, and dates and places that prove
the individual existed. The proof of lineage must stand
in court, so the more paperwork you can produce that cross-references
other materials, the better. These papers may reveal discrepancies.
In other words, a cemetery deed may not show up in a will.
In that case, the plots are often forgotten, especially
if they've never seen an ancestral body.
- Go
to the burial site to scope out the scenery. If you contact
the cemetery before your visit, they may send you a map
of the cemetery and mark your ancestor's spot in the landscape.
From experience, I can tell you that it's a good idea to
ask if a stone was placed on the grave before you visit.
Otherwise, you might walk around the area wondering if you've
lost your mind. If a marker is nonexistent, the cemetery
might have information about the funeral home that handled
your ancestor's last remains. Either the cemetery or the
funeral home (or even a town or county's public works department)
may tell you who owns the plot and how many bodies are buried
in that space.
While
you may make an interesting discovery, you might also consider
the estate and inheritance tax scenario mentioned above. Do
some extensive legwork before you lay claim to these properties
for yourself or your progeny. Ask a lot of questions and scratch
out some sums for comparisons. While you may find a nice resting
place, you might realize that Lake Whatever is the less expensive
route to the Great Beyond.
Next week,
we'll look at how a discovery like the one mentioned above
might land you in a financial hole deeper than six feet; or,
how this discovery might elevate your status within your family
to one of a saint, especially if you uncover a few investment
nuggets in your search.
Until
Next Week,
Linda Goin
* Money
Magazine (August 2004), p.33. Source: CCH, Center on Budget
and Policy Priorities, Minnesota House Research Department.
|
