When people think of Estate Planning, they generally think of legal wills. Estate planning is not just a will, although it does involve writing one. Rather, it’s a series of legal steps that involves allowing your beneficiaries to avoid probate and minimize the taxes incurred, and for you to write a living will in which you nominate trusted associates who would assume power of attorney and executor status should you be incapacitated or die. Estate planning also allows you more direct control over how your assets will be treated when you’re gone.
One of the most important parts of any estate plan are measures to avoid too much of the estate’s worth being lost to taxes. In Clinton Utah, dying can attract a number of specific taxes from both State and Federal governments, like death tax and estate tax. The simplest way to minimize estate tax is to name recipients of funds or assets from your estate in your legal will, specifying that a certain amount should be given as a gift. Provided your lifetime tax-free gift threshold of $1 million is not exceeded, these portions cannot attract any taxation.
An important part of any estate plan is the inclusion of a living will. A living will is not usually considered a legally binding document, however, it is given consideration if you are ever incapacitated and left unable to carry out your legal rights, or make decisions. While the living will itself may not carry much weight, you can nominate someone to assume your enduring power of attorney (EPA). If you are unable to exercise the living will as a legally binding decision, your enduring power of attorney can only be challenged by a court.
The will itself is the most important part of any estate plan. If you should die without writing a will, the specific laws of your state will determine how your assets will be divided following probate. Additionally, with no prior planning of where the assets should go on the event of your death, your estate is likely to be taxed the maximum possible amount. Where no will is present, the spouse is likely to keep one third of the value of the estate with the remainder to be distributed evenly among children.
An estate plan enables you to stipulate, for instance, that if your children receive an inheritance, the property is given to them personally and not, for example, to the child’s spouse. Should your child ever divorce, then the value of any inheritance received would not have to be shared in any divorce settlement, as it would not be a shared asset of that marriage. One of the more important aspects of estate planning is the protection it can provide your assets. Typically, after a person passes away their family sells the assets that were left to them and divides the proceeds among themselves. If, however, you have a company or significant property holdings, you may wish to prevent the breakup of any of these assets, judging them to have more value whole compared with their value after being broken up.
Estate planning allows very specific instructions for how such assets should be treated if you wish to prevent this asset division from happening. For example, you can specify in your will that you require that your business be run by a family trust whose members and membership requirements you specify. It is not uncommon for people to wish to leave behind some legacy when they’ve gone, and the establishment of a family trust to ensure your assets are managed properly by a family member is a good way of ensuring it. Another common request made is for a trust fund to be established as a scholarship fund or similar. Again, with a proper estate plan, it is possible for a benefactor to specify who a scholarship fund is for, and who is allowed to sit on any board or committee it relies on to pick a recipient.
Estate planning is the method by which specific instructions may be given in advance on how to manage your affairs should you become incapacitated or die. Estate planning represents the best way of protecting your assets from the whims of financially irresponsible relatives, excessive government taxation, and dissolution of your assets by the normal laws of succession in the state or country concerned.
Estate Planning Probate – Keeping Estate Assets Out of Court
Estate planning probate is the legal process used to designate beneficiaries whom you wish to receive your assets in the event of your death. Many people postpone estate planning; especially when they are young and in good health. Unfortunately, death oftentimes arrives unannounced and can strike when you least expect it.
Inadequate planning creates an enormous burden for your family and loved ones should you die unexpectedly. Estate planning probate generally requires the services of a qualified probate lawyer. This type of attorney specializes in estate planning and can assist in keeping estate assets out of probate. It is important to understand that everything you own is transferred to probate unless you have taken steps to avoid the process.
Probate is the legal process used to validate your Will and ensure assets are transferred to rightful heirs.
Probate laws are governed by each individual state. Financial assets and personal belongings can be gifted to anyone you choose. However, in most states, financial and real estate holdings are automatically transferred to your spouse. Assets held by unmarried decedents typically transfer to direct lineage relatives such as children, parents or siblings. When decedents do not engage in estate planning probate prior to their death, it is referred to as dying ‘intestate’, which means “without a Will”. A probate judge must designate an estate administrator to locate missing heirs and determine the rightful owners of your property.
The probate process in Clinton Utah can be quite lengthy and can be prolonged for months or even years. Estate planning experts state the average probate case lasts for three years. During this time the estate is responsible for all expenses related to probate. These expenses can include paying mortgage payments, maintaining real estate, property taxes, and attorney fees. Assets held in probate depreciate with time. Add in all the costs associated with probate and estate assets can quickly be depleted; leaving little to nothing for the heirs. This can easily be avoided my executing a Last Will and Testament and establishing probate planning. There are many simple techniques which can be established to keep assets out of probate. Estate planners can assist you in arranging transfer-on-death (TOD) and payable-on-death (POD) accounts; executing a Will; and all other aspects of estate planning. Depending on the size and value of your estate, probate lawyers might recommend establishing a living trust or irrevocable life insurance trust. Trusts are generally reserved for estates valued at $100,000 or more. By transferring assets to trusts, you can avoid probate altogether and maintain your privacy. Probate is a matter of public record; whereas trusts are private and are not submitted through the court system. Additionally, funds held in trusts are oftentimes exempt from taxation.
Estate planning is not difficult or expensive. All that is required is to legally document what you own and who you would like to give it to when you die, and the designation of a probate executor. The person appointed to this position should be good with money and someone you trust. Estate planning probate is an ongoing process. Will and trusts should be updated on a regular basis to record changes in assets or to designate a different probate executor. Probate lawyers usually charge a nominal fee to update Wills and trusts. However, it is a small price to pay to ensure your loved ones are protected in the event of your death.
Estate Planning is Essential For Protecting Inheritance Assets
Estate planning is a fundamental part of life planning and requires executing legal documents to ensure beneficiaries receive intended inheritance gifts in the event of death. While few people jump for joy at the idea of planning their estate, it is important to at least implement basic elements to protect loved ones. Minimum estate planning should consist of a last will and testament, durable power of attorney, and healthcare proxy. Individuals whose estates are valued higher than $100,000 might consider transferring inheritance assets into a trust.
Executing a last will is a simple process that does not require a lot of time. A will provides details of how assets should be distributed. Upon death, the will is submitted through probate court and becomes a matter of public record. Probate can be prolonged when individuals die intestate (without a will) and assets are distributed according to state probate laws. Executing a will is particularly important for individuals with minor children. Wills include guardianship provisions to protect children if one or both parents die. If no will exists, the children’s fate will be determined by a probate judge.
Estate planning lawyers can help establish a final will or trust. Depending on the complexity of your estate, the cost to execute a legal will can range from less than $100 to more than $1000. Trusts require additional paperwork and time. Assets placed in trusts are usually exempt from inheritance taxes. In order to draft a will, you will need to write out a list of personal property, real estate holdings, financial investments, life insurance policies, and business interests. Next, you need to determine who will receive each asset in the event of death. While it can be uncomfortable to discuss plans with heirs, it is important to talk about death planning so everyone is aware of your wishes. Open communication can prevent misunderstandings and family disputes once you are no longer around.
Granting power of attorney rights is an important decision that should not be taken lightly. POA grants authority to a personal representative to act on your behalf in managing finances. The designated agent should be trustworthy and willing to accept the duties if you are incapable of making decisions for yourself.
Healthcare proxies document your wishes for medical care that you do or do not want should you become critically ill and unable to communicate. A healthcare proxy allows you to place in writing life-saving directives including resuscitation, nutrition and life support. Many people falsely believe estate planning is only for the wealthy. Nothing could be further from the truth. Regardless of assets and net worth, it is always a smart decision to execute a legal last will, power of attorney and healthcare proxy. Dying without these documents can place a heavy burden on your loved ones.
How an Estate Planning Lawyer Can Help You Write Your Will
For many people, deciding what will happen to their property and belongings once they die are a very sensitive subject. This is understandable, as it can be uncomfortable to contemplate one’s own mortality. However, writing a will and taking other precautions is a necessary part of preparing for death. It can discourage litigation over a person’s property or even make that litigation unnecessary. Because this topic is so complex and there are many options available for disposing of one’s property, an estate planning lawyer can be very helpful in assisting a person of any age decide how their property should be divided. An estate planning lawyer can help with many things, including but not limited to writing a will.
A will is a document where the writer, or testator, declares a person to manage his estate once he passes away and decides how his property will be divided upon his death. There are many requirements for writing a will and making sure that it is valid. Only valid wills have legal effect, and thus failing to observe a necessary formality or meet a requirement will result in the will having no effect and the property being distributed according to the rules of distribution for those who have died without writing a will. This can often have totally different results than what the testator intended.
For all testators in all states, they must have the proper mental capacity to write a will. This involves being of the age of majority and having the requisite mental capacity to understand the consequences of writing a will. Although there will be plenty of evidence available regarding a testator’s age, evidence of mental capacity is often more difficult to prove. Consulting with an estate planning lawyer and discussing the writing of the will and the disposition of one’s property can provide important evidence about the testator’s mental state and whether or not he understood the actions he or she was taking. Other requirements vary by jurisdiction, and an estate planning lawyer Clinton Utah can help explain which requirements a testator must meet to write a valid will in the state where they reside. Some of the more common requirements are a declaration that the document is the last will and testament of the testator, declaring that the testament revokes all previous wills, and how clearly the property and the beneficiaries must be identified.
Additionally, there are certain forms requirements that must be followed if the will is to have legal effect, such where the testator must sign and date the will. In addition to the form requirements, each jurisdiction has its own rules about who can and cannot be a witness to a will. This may include age requirements, mental capacity requirements, and rules about whether or not property can be left to a person who witnessed the will. There are also rules about where the witnesses must sign the will and whether or not they must sign it in the presence of the testator or may do so at a later date.
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