Estate planning is the process of designating who will receive your assets in the event of death or disability. It is a way to ensure that your heirs and beneficiaries receive assets in a way that manages and minimizes estate taxes, gift taxes and other tax impacts. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual before death. Estate planning is the preparation of tasks that serve to manage a person's asset base in the event of disability or death.
Most estate plans are established with the help of an experienced probate lawyer. It includes the bequest of assets to the heirs and the settlement of estate taxes. A comprehensive estate plan can resolve many legal issues that may arise as you age and your health situation changes. DIY estate planning, with the help of estate planning software or websites, is an option for simpler estates.
Wills are a common estate planning tool and are generally the simplest device for planning the distribution of an estate. You can give away parts of your estate to your family ahead of time instead of waiting to die to give it all away. You can get an affordable, legal, effective and valid Estate Plan that ensures that your wishes are known should the time come when it's needed. As with other estate planning documents, you must keep your named beneficiary designations up to date.
If a revocable living trust is used as part of an estate plan, the key to avoiding succession is to ensure that the living trust is funded for the life of the person establishing the trust. Lack of proper estate planning can cause undue financial burdens on loved ones (estate taxes can reach up to 40%), so at a minimum, a will must be established even if the taxable estate is not large. Ideally, your financial advisor and attorney will work hand in hand to ensure that you are making the best estate planning decisions for your situation and that you have your assets in order. Assets that could constitute a person's estate include houses, cars, stocks, works of art, life insurance, pensions, and debts.
To establish the taxable value of the estate, you must find the total value of the estate and subtract the debts you owe. Donations reduce the financial size of the estate, since they are excluded from taxable wealth, which reduces the wealth tax bill.
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