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Did you know that if you die without a will, the laws of your state govern how your property is distributed? And did you also know that if you die without any heirs-at-law, the state itself may be the ultimate beneficiary? This may be avoided by creating a simple will.

In general, those who die "intestate" -- that is, without a will -- lose the ability to control the passing of their property to their heirs. Whether it stands alone or as part of an integrated estate plan, a will provides for the disposition of property not otherwise so provided. A will is a necessity in any estate plan.

Among other things, a will may:

  • direct the disposition of property according to your desires;
  • establish a trust to provide for minor beneficiaries long after your death;
  • nominate guardians for minor children; and,
  • provide for the "pour over" of assets into a previously established trust which were not already transferred to the trust.

Your will is effective only upon your death. As such, you can always amend or revoke your will during your lifetime in order to take into account changes in circumstance(s) or condition(s). Indeed, your will should be reviewed both periodically and at the happening of certain events such as:

  • changes in family circumstances, i.e., births, deaths, marriages or divorces;
  • your move from one state to another;
  • changes in federal or state tax laws; or
  • significant changes in assets or property values.

A will does not by itself provide the beneficiary with any income or estate tax benefits. Accordingly, more sophisticated estate planning may be necessary in certain instances (such as when your estate is valued above the federal and/or state estate tax exemption amount1). Nonetheless, creating your will may be the first step toward an integrated estate plan.

 

 

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1According to the American Taxpayer Relief Act of 2012, the federal estate, gift and generation skipping transfer (GST) tax exemption amounts are all $5,000,000 (indexed for inflation effective for tax years after 2011); the maximum estate, gift and GST tax rates are 40%.

For more information on this subject, and professional guidance in selecting the right kind and amount of insurance coverage, contact your life insurance producer.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any fixed subaccount crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Variable insurance products are distributed by Pacific Select Distributors, Inc., (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and an affiliate of Pacific Life & Annuity Company, and are available through licensed third-party broker-dealers.

Pacific Life's Home Office is located in Newport Beach, CA.