A Certified Retirement Financial Advisor, Darcy Bergen serves as a managing partner and president of Bergen Financial Group, an Arizona practice known for creating financial strategies for seniors and retirees. Leveraging his knowledge and expertise, Darcy Bergen offers financial advice to clients, especially in retirement planning, risk management, social security planning, wealth transfer strategies, wills and trusts, and estate planning.
Estate planning is making prior arrangements, through the assistance of an attorney knowledgeable in estate law, to determine how a person’s assets or “estate” will be preserved, managed, and distributed in the event of that person’s death. Estate planning also includes the settlement of estate tax, which happens before bequests are made to the heirs. The basis of the estate tax is the value of the decedent’s estate. Here’s how the estate is valued.
First, the estate's value is computed as of a specific date. The date can either be one of two options: the date of the decedent’s death or the alternate valuation date, which is six months after the decedent’s death. If the latter is chosen, all assets sold or distributed within the six months after the decedent’s death are valued as of the date the assets were sold or distributed.
Second, a list containing all assets that the decedent owned, including those they have an interest in, is prepared. This list may include cash, bank accounts, real properties, vehicles, furniture, jewelry, investments, insurance, and anything else that has value.
Third, actual valuation is made. If the decedent owned an asset in its entirety, the entire value of that asset is included in the estate. If the decedent owned an asset jointly with their spouse, only 50 percent of the value of that asset is added to the estate.
Fourth, all claims against the estate are deducted, including all regular bills that have accrued, outstanding mortgages, tax obligations, and charitable gifts.