with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem -

An estate plan can be designed by clients and their professional advisors to achieve the client’s personal and financial objectives. Or, it can be an arrangement imposed upon survivors by state intestate succession laws if someone dies with¬out a valid, up-to-date will. Even though a will is the most basic estate plan¬ning tool, two out of three Americans die without one.

A comprehensive estate plan can arrange the ownership, management and distri¬bution of your assets in ways that meet your needs and objectives while mini¬mizing estate shrinkage. Without such a plan, whatever you may think is going to happen to your estate after you're gone probably won't.

• Estate settlement and distribution -- Estate transfer is a privilege that can be exercised only by following specific legal procedures designed to protect the rights of deceased’s heirs. Estate settlement, as this process is called, involves the assigned executor making an inventory of the person’s business and personal assets, paying all debts and claims against your estate, identifying the legal heirs of the remaining estate assets, and distributing those assets accordingly.

• The problem of estate shrinkage -- The costs associated with estate settlement include funeral expenses, medical bills, legal fees, administration costs and other debts, as well as various federal or state taxes. These costs can drastically shrink the size of your estate. Because they must be paid before the estate can be fully settled, they can also delay distribution of your remaining assets to your heirs.

• The need for estate liquidity -- Estates are often cash poor. Unless sufficient liquidity has been provided, the forced sale of nonliquid assets to pay settlements costs can compound estate shrinkage. In these situations, the buyer always has the upper hand. But even people of modest means who never considered themselves rich enough to need much estate planning can be in for a shock. In addition to having to settle-up with Uncle Sam and state tax collectors, creditors must be paid in full before a taxpayer's heirs can receive their inheritances.

• A false sense of security about estate taxes -- Part of the problem may be that people are so concerned about reducing their income taxes, they forget that the federal estate tax rate is virtually double the income tax rate. Actually, anyone with at least $600,000 in assets has a potential federal estate tax liability and may also face state death taxes. Federal estate tax laws, particularly the unlimited marital deduction, have lulled many taxpayers into a false sense of security. Even with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem --

n't.

• Estate settlement and distribution -- Estate transfer is a privilege that can be exercised only by following specific legal procedures designed to protect the rights of deceased’s heirs. Estate settlement, as this process is called, involves the assigned executor making an inventory of the person’s business and personal assets, paying all debts and claims against your estate, identifying the legal heirs of the remaining estate assets, and distributing those assets accordingly.

• The problem of estate shrinkage -- The costs associated with estate settlement include funeral expenses, medical bills, legal fees, administration costs and other debts, as well as various federal or state taxes. These costs can drastically shrink the size of your estate. Because they must be paid before the estate can be fully settled, they can also delay distribution of your remaining assets to your heirs.

• The need for estate liquidity -- Estates are often cash poor. Unless sufficient liquidity has been provided, the forced sale of nonliquid assets to pay settlements costs can compound estate shrinkage. In these situations, the buyer always has the upper hand. But even people of modest means who never considered themselves rich enough to need much estate planning can be in for a shock. In addition to having to settle-up with Uncle Sam and state tax collectors, creditors must be paid in full before a taxpayer's heirs can receive their inheritances.

• A false sense of security about estate taxes -- Part of the problem may be that people are so concerned about reducing their income taxes, they forget that the federal estate tax rate is virtually double the income tax rate. Actually, anyone with at least $600,000 in assets has a potential federal estate tax liability and may also face state death taxes. Federal estate tax laws, particularly the unlimited marital deduction, have lulled many taxpayers into a false sense of security. Even with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem -

s and other debts, as well as various federal or state taxes. These costs can drastically shrink the size of your estate. Because they must be paid before the estate can be fully settled, they can also delay distribution of your remaining assets to your heirs.

• The need for estate liquidity -- Estates are often cash poor. Unless sufficient liquidity has been provided, the forced sale of nonliquid assets to pay settlements costs can compound estate shrinkage. In these situations, the buyer always has the upper hand. But even people of modest means who never considered themselves rich enough to need much estate planning can be in for a shock. In addition to having to settle-up with Uncle Sam and state tax collectors, creditors must be paid in full before a taxpayer's heirs can receive their inheritances.

• A false sense of security about estate taxes -- Part of the problem may be that people are so concerned about reducing their income taxes, they forget that the federal estate tax rate is virtually double the income tax rate. Actually, anyone with at least $600,000 in assets has a potential federal estate tax liability and may also face state death taxes. Federal estate tax laws, particularly the unlimited marital deduction, have lulled many taxpayers into a false sense of security. Even with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem -

ddition to having to settle-up with Uncle Sam and state tax collectors, creditors must be paid in full before a taxpayer's heirs can receive their inheritances.

• A false sense of security about estate taxes -- Part of the problem may be that people are so concerned about reducing their income taxes, they forget that the federal estate tax rate is virtually double the income tax rate. Actually, anyone with at least $600,000 in assets has a potential federal estate tax liability and may also face state death taxes. Federal estate tax laws, particularly the unlimited marital deduction, have lulled many taxpayers into a false sense of security. Even with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem -

with a will, anyone who thinks "leaving it all to my spouse" is the way to avoid estate taxes and other estate settlement hassles needs to think again.

• The marital deduction is an important estate planning tool. It provides that any assets passing to a surviving spouse pass tax free at the time the first spouse dies (assuming the surviving spouse is a U.S. citizen). However, the marital deduction ends after the first death. Unless the surviving spouse remarries, the real impact of the federal estate tax is felt at the sec¬ond death. In fact, the bill may even be higher if the estate continues to grow.

• The "second-death" problem -- How big a mistake can it be for an estate owner to leave everything to his or her spouse under the marital deduction? Consider this example: A married couple with two children each have assets of $1 million, which they intend to leave to each other under the unlimited marital deduction. If the husband dies first and leaves his entire $1-million estate to his wife under the unlimited marital deduction, his taxable estate will be zero. As a result, how¬ever, if the wife does not remarry, her gross estate at her death could be $2 million, under the unlikely assumption that the assets will not appreciate. Without some careful estate planning, the federal estate tax could take a big bite out of the children's inheritances at their mother's death.

Meeting estate planning objectives. If an estate is going to be big enough to tax, a will is just the beginning. The client may also need to do some additional estate planning to meet other impor¬tant objectives:

• Avoiding probate

• Reducing or eliminating estate shrinkage

• Providing sufficient liquidity to cover estate settlement costs

• Minimizing federal estate taxes and state death taxes

• Providing for the orderly disposition of a business or professional prac¬tice

• Maintaining the family's lifestyle and meeting other financial secu¬rity objectives,

To avoid making mistakes, people need professional advice from a qualified attorney, trust officer, accountant or other financial advisors. Estate planning has helped countless numbers of people reduce their estate tax liabilities and prevent the needless loss of business and other assets.

Remember, however, that while tax savings may be a primary issue, they’re not the only issue. Estate planning is also a way for people to reflect, perhaps for the first time, on what they'd like to have happen to their property after they're gone. Much of the cost and inconvenience of estate settlement can be reduced or eliminated during a person’s lifetime. It can be done by making decisions to imple¬ment strategies for conserving and distributing your assets most advantageously. Among these strategies are the use of:

• Jointly owned property

• Lifetime gifts

• Wills

• Trusts

• Life insurance

Planning to provide for a family’s needs at the household head’s death is essential, especially if the employer’s pension option is "single payer." Annuities offer the security of a guaranteed death benefit, which passes to the owner’s named beneficiary(ies) free of the costs and delays of probate. With some annuities, a spouse who is the primary beneficiary has