Estate planning involves distributing your assets after death to such people or causes according to your wish with minimum legal complications and the least tax incidence. And estate planning is not just for the wealthy; nor is it something to be contemplated when you reach the ripe old age of eighty. Anybody, irrespective of age, with considerable assets and the desire to provide for dear ones even after death would be doing a great service by planning one’s estate. And the best time to plan your estate is now when you are still alive and have the requisite mental health to make rational decisions. An estate plan made during an illness affecting contracting capacity can be challenged, complicating matters for beneficiaries. Remember, death or a debilitating illness affecting your legal capacity to contract might strike you any day; therefore, you should prepare for that eventuality beforehand.
The first step in planning your estate is to take stock of all your material possessions (technically referred to as ‘estate’), and then determine their value. Typical items comprising the estate include: house(s) and land; bikes, cars, planes and boats; cash-in-hand; savings accounts, pension accounts; certificates of deposits; stocks, bonds, and mutual funds; insurance and annuities; employee benefits; jewelry, furniture, art collections; ownership rights/interests in businesses; and claims against others. Mind you, the list is not exhaustive and your debts and obligations to others are also a part of your estate.
Next, line up the details of your beneficiaries – names, addresses, and ages. In addition, you should determine who should be the trustees/guardians in case the beneficiaries are minors at the time of planning the estate. Also, you must identify an executor of the estate. It would be easy if you line up pre and post nuptial agreements, divorce decrees, previous wills, deeds of real estate property, and latest tax returns before you consult a professional estate planner. Though small estates might be easy to plan, it is advisable to take the help of professional estate planners, including attorneys and CPAs, to explore all the possibilities to reduce tax incidence. Remember, estate planning is not a one-time affair. Any change in your marital status, death of beneficiaries, a birth of a child, or changes in the law will require a review of the plan
Is Estate Planning for Everyone?
Many people think they don’t need an estate plan. They relate the term to tax planning and feel that their estate is not big enough to bother. They therefore think estate planning has nothing to do with them. But estate planning is more than a method to avoid or reduce estate taxes. Many young families might be surprised to learn they should think about estate planning now. Right now there is an effort to abolish or confine estate taxes to only the very wealthy. Of course, Congress changes the tax laws constantly, so there can be no guarantee that this trend will continue. Be even a normal working class couple with a home, two cars, money in retirement or 401K plans and maybe the start of a college for their children can have a surprisingly large estate. So even if estate taxes don’t apply today, they may in the future.
Estate planning can be used to distribute your taxable estate in such a way that taxes are minimized. There are all sorts of ways to do this and, if you are wealthy enough, your financial planners and attorneys should be working together to do this for you. For the rest of us, estate planning is less involved with taxes and more with who inherits your estate; who cares for your minor children; how you feel about life support measures; or who will control your affairs if you are unable to. Your estate is all you possessions – savings, home, car, investments etc. If you have a will, your estate will be distributed according to your wishes. If you don’t, they will be distributed under state intestate laws. You would have to check the laws in your state, but there could be cases that if you die without a will, your parents would inherit your property, not your wife or your money could go to distant cousins and not to your lifelong companion.
So the first reason for a will is to have your property distributed according to your wishes. If you want to leave your money to the Salvation Army and not your son, this is the way to do it. Many parents use estate planning to try to rein in their out-of-control children. They may provide for a bequest that starts at an age when the child has hopefully matured, say 35. Or they may make provisions that if their daughter is divorced, no money would pass to the ex-husband. More commonly, grandparents use estate planning tools to provide for all or part of their grandchildren’s’ college education or choose to bypass their family and leave their money to their favorite charity. Or a business owner could pass his business to his partners or employees in order to keep the business running. A common use of estate planning is to name subsequent beneficiaries. For example, your spouse would inherit your art collection on your death and on her death it would go to a museum.
Another reason for estate planning through a will is to appoint guardians for minor children or disabled relatives you are now caring for. If you are leaving a bequest in your will or the proceeds of an insurance policy (which is generally not part of your estate) to a minor or person unable to look after his own affairs, you also need to appoint someone to manage, conserve, invest and dole out this money for the care of the minor or incapacitated person. If you are ill or facing the prospect of losing your ability to control your own affairs, you can use estate planning techniques like a durable power of attorney, property transfers or adding a trusted friend or relative as joint owner of your property and bank accounts.
You can also provide for a living will, directing how far you want life support measures to go if you are terminally ill. So estate planning is more than leaving your grandmother’s watch to your daughter. The proceeds of most life insurance policies and jointly held property with rights of survivorship are not generally part of the probate estate. Many people believe that they can use these devices instead of a will. However, only the specific property held jointly is transferred to the surviving owner. For example your house would be transferred, but not any of your separately held investments. Also problems arise if there is concurrent death, e.g. an auto accident that kills the husband and wife.
There can also be adverse tax consequences to passing your property this way. They are so many different situations and methods of estate planning, it is best left in the hands of a professional, in this case an estate lawyer working alone or in conjunction with your financial planner. Simple wills are not expensive and can be drawn with the help of advice books or computer software programs. But if you have to go beyond simple, hire the right professionals. Estate planning is a complex field. If you have more than a house, car and banking account that you want your wife to get on your death; you should consult a qualified estate planning attorney.
Reasons Why You Should Have an Estate Plan
The last thing you want to think about right now is writing your will. It’s enough we have so many reminders of our mortality, but having to sit down and dictate who gets what after you die seems to create that final mark of inevitability. You might believe, too, that wills are only for rich people, and that since you aren’t wealthy there’s no reason why your family can’t amicably divide your possessions after you’re gone. In truth, it’s important to have your estate planning in order before you die so that your wishes are carried out.
Whether you have two million dollars in the bank or just two hundred, you need to draft a last will and testament. You may be deceased, but what you leave behind will last a while longer, perhaps too long if you have not provided guidance for your survivors.
• Estate planning ensures that your spouse and children, or whomever you appoint as your heirs, will have less difficulty taking control of your assets. If you were to die with property solely in your name, and no will to appoint a beneficiary, your estate could end up in probate. A court would then determine your estate’s assets and debts and disperse as seen fit. Working with an attorney specializing in estate planning will see that your real estate, cars, and other property are given to the heirs you choose.
• Consequently, having a will that details your final wishes prevents family squabbles. It is not uncommon for siblings and other relatives to come to blows over sentimental items like jewelry, antiques, or even land. Take the time to draw out distribution of these items and make your heirs aware of your intentions so that you can smooth any wrinkles before your time comes.
• Planning ahead of time can help alleviate any tax issues your family will face upon your death. Inheritance taxes may prove a burden for some of your heirs, who may end up selling what they receive in order to pay off the debts. With a good estate planner, you can eliminate tax problems.
• If you believe some of your heirs will come to collect in their minority, it’s important to make sure their interests are protected. An estate planning attorney will help you appoint a legal guardian in the event this happens. You don’t have to be a millionaire to draw up a will. If you possess anything of value, whether financial or sentimental, you want it in good hands when you are gone. Having an estate attorney help you is the best way to ensure that.
Questions To Ask Estate Planning Lawyers In Saratoga Utah.
Planning the distribution of your assets can be a daunting task if handled alone. It’s hardly surprising that many individuals seek legal assistance to face the challenge. Choosing estate planning lawyers is not always simple, but it can make an otherwise difficult experience much easier. Working with estate planning attorneys can reduce the time spent considering your options and may lead to a better result. In order to allow things to proceed as smoothly as possible, experts recommend that you ask some targeted questions that may help shape the plan you choose.
Question 1: What Hassles Could My Assets Cause For My Heirs?
Although the idea of a will is to provide a clear and concise vision for how you would like your assets to be distributed, the actual process of distribution is rarely as straightforward as we would like. In fact, the process of probate is notoriously difficult, and can be much more so in any family that has a lot at stake or severe family differences. There are stories of major legal battles when one member of the family disagreed with how the will had been interpreted. Estate planning lawyers can advise you of any potential problems that might arise, and what legal grounds might exist to support or deny such claims. By considering this question, you’ll be helping your heirs later on.
Question 2: Is My Will Clearly Written And Reflective Of My Wishes?
If you’ve given the matter much forethought, you probably already wrote a will. Most people do choose to write their testament before visiting estate planning attorneys. However, by the time you are considering your actual assets, it is high time to revisit that testament written years earlier. During that time, you may have changed your mind about how your assets should be administered. You might also find that your assets themselves have changed substantially, necessitating an update of the document. Finally, your estate planning lawyers should be able to indicate whether the language of the document itself is sufficiently clear. In many cases, an older document may leave too much ambiguity, possibly leading to a disagreement during probate.
Question 3: Is My Current Plan The Best Way To Provide For My Heirs?
Estate planning attorneys can show you many ways to leave things for your heirs. In some cases, your assets need not be dealt with during probate, or can be dealt with in different ways from what you might expect. You should think outside the box during this time, because it can create a substantial benefit for your heirs. The law provides many different ways in which one person may leave a sum of money, piece of property, or any other asset to children or another heir. Your estate planning lawyers can advise you on unknown ways that might provide a bigger benefit or less hassle. By considering these simple questions, you can help your legal representative craft a plan that most closely conforms to your wishes. Your heirs will receive the benefit you wish them to, with minimal lost time due to probate and minimal confusion from the last will and testament.
There are many options to consider and many questions to ask beyond these, but this is a starting point.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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