What Estate Planning Documents Should You Have?

Many individuals know the importance of estate planning as part of their long-term financial planning task list. But the majority of these people procrastinate because they don’t have an idea of the essential documents required for the task. In fact, estate planning isn’t difficult when you know what estate planning documents you should have. This article provides information on what estate planning documents you should have.

The Last Will & Testament is one of the most important documents that you need to have when planning to distribute your assets after your death. Although the name may sound intimidating, this document is nothing more than a written legal document that highlights how you would like your property and assets distributed after your death. You can name an executor to carry out the instructions on the Last Will. You can also name guardians for your minor children in this document.

The Living Will is another important document in the estate planning process. This document is also known as a Healthcare Proxy – which includes your wishes regarding medical care facilities if you need to be on a life support system or become terminally ill. One may also consider a Healthcare Power of Attorney when preparing a Living Will. The Healthcare Power of Attorney will permit the individual to designate a healthcare agent to carry out the tasks in the Living Will.

A Living Trust is another important document in the estate planning process. Many people involved in the estate planning process would step up a Living Trust. This document will help your estate to avoid a probate court. This is very important since a probate court can take up to three years and cost more than 10% of the value of your estate. It also helps ensure your privacy since probate documents are open to the public. That is why you need to seriously consider a Living Trust when planning your estate.

The Financial Power of Attorney is considered another important document when it comes to estate planning. This document helps to designate a person to manage the affairs of your estate – including any financial decision. You can also choose when the appointment goes into effect – whether it is with immediate effect, or a future date, or only under certain circumstances.

The aforementioned article provides information on what estate planning documents should you have.

What You Need To Know About Estate Taxes

If you have a large estate, your heirs might be on the hook for a large estate tax bill. The estate tax is a tax on property and assets that is triggered when your estate passes to your heirs. Most people don’t have to pay any estate tax, but if the estate is worth over 5.5 million if you are single and 11 million if you are married, you are going to have to pay it.

Most people have estates that are worth much less than this value and they don’t even have to worry about owing any tax on their estates at all. Only the wealthiest estates in the country have to worry about paying this tax. You will have to have your estate valued to know if you are going to be responsible for paying this tax or not.

If you do need to pay the estate tax, there are certain things you can do to reduce the amounts that you owe. Meeting with an estate attorney is a good idea as the attorney can help you go over certain things that can reduce your tax burden. In fact, there are many different loopholes you can take advantage of to get your tax burden down to almost nothing.

Keep in mind that most people won’t owe anything, so it just isn’t a concern for most people as their estates just aren’t large enough to owe any taxes. Since only the truly wealthy are taxed, most people can enjoy the full value of their estate without having to pay any tax at all on it.

The estate tax helps to fund government programs and even though 99.8 percent of households won’t need to pay the estate tax, the money that is generated is a big source of revenue and it is something that is much needed. This money can go to help everyone and the estate tax isn’t even much of a burden for the people who have to pay it.

Most countries have to pay much more money in estate taxes and the United States is very moderate when it comes to estate taxes. The tax only affects the people who are most able to pay it and it is a crucial part of the tax code. If you have to pay the estate tax, consider yourself lucky that you are worth so much money.

What You Need To Know About A Durable Power Of Attorney

The Durable Power of Attorney is one of the most important legal documents. This document gives someone else the right to make legal decisions on your behalf if you become incapacitated and can’t make decisions. You can limit the scope of the Durable Power of Attorney, or you can make it very broad.

When you appoint someone with this power they can do things like sell your home or car. They could also sign contracts in your place or even make health care decisions for you. The person can handle your finances and perform any legal actions that you can’t do yourself.

A general Power of Attorney allows the person you appoint to do every type of legal act. It gives the person broad powers, so you have to think carefully about who you want to appoint to this very powerful position. You can always specify what types of things you want the other person to be able to do for you if you don’t want them to gain full control of your estate.

The Durable Power of Attorney ensures that your power of attorney doesn’t end when you become incapacitated. You want to think about who you want to appoint with these powers while you are still mentally capable. If you appoint someone with Power of Attorney and you are not mentally capable, your appointment could be challenged.

When you are appointing someone with Power of Attorney, you also have to think carefully about what you want them to be able to do. You have to trust this person and you have to be sure that they are going to act in your best interest if you are incapacitated. Knowing that someone is there to do your wishes if you can’t make your own decisions gives you peace of mind and it ensures that your estate is going to be taken care of the way you want it to.

A Durable Power of Attorney helps you to avoid intervention by the courts and it also helps to ensure that someone you don’t want to manage your financial affairs ends up managing them. The Durable Power of Attorney helps you manage your assets and ensures that they get to the people you want them to go to. You never know when you are going to become incapacitated and having a Durable Power of Attorney protects you.

Why You Need An Estate Plan If You Are Single With No Kids

If you have a spouse or kids, your assets go straight to them after you die. You name your spouse or children as beneficiaries on your accounts and there is no question as to where they are going to go. When you don’t have a spouse or children, things can get a little more difficult because you might not be sure who your assets should go to and choosing an executor for your will could be tricky.

If you don’t have an estate plan, legal costs are going to eat away at your estate and the court will end up naming an heir. Your estate might not go where you want it to go. Even if you don’t have kids or a spouse, it is better to set up an estate plan. You might want to leave your estate to charity, a school, or a trusted friend. None of this will happen if you don’t have a decent estate plan in place.

Draw up an estate plan and think about the causes that interest you. If you have a sizable estate, you could establish a foundation. Do this while you are still alive and you can enjoy it while you are still here. Gifting your money before you die allows you to see the effect that it is going to have on other people.

Other considerations you have to take into account when you are planning your estate are who you are going to name for medical power of attorney. If you get sick and you are unable to make your own health care decisions, you need someone who will be able to do this for you. You also need to name beneficiaries for your 401(k) and life insurance policy.

You might also want to name someone as durable power of attorney in case you are no longer able to handle your finances. You will also need to name someone to be the executor of your estate. The executor is going to distribute your assets and file your will with the court.

This person has to be someone you trust and who can handle the duties of taking care of your estate. If there is no one in your life that you trust to be executor of your will, you can always name your bank. An estate plan is essential, even if you are single.

What Happens If You Die Without A Formal Will?

Have you ever wondered what would happen to all of your assets if you die without having a will? It is very important to have one officially made so that it will provide a legal pathway for the distribution of your assets. There are some that wonder what will occur with their home, bank accounts, and any assets that they have if they do not have a will before they die. Here is an overview of what could possibly happen if you do not get a will drawn up before your death.

What Does Intestate Mean?

This is a term that is often used to describe the situation where a person has died without a will. It means that intestacy laws will kick in, in the state that you are a resident of, in order to determine how all of your assets will be distributed from that point forward. These laws pertain to your assets such as your real estate, securities, bank accounts, and every other asset that you currently own. If you had property in a different state, the laws of that state will then determine what happens to that property. Intestate laws will be different for those that were married or single. They also change depending on whether you had children or not. In most cases, different portions of the property are distributed to people in your family who are referred to as the heirs of your property. This can include your surviving spouse if you have one, children, brothers and sisters, and other family members.

What If Someone Does Not Have Family?

If someone dies with assets, and they do not have any immediate family at all, it almost always goes to the state in which you died. This is why it is so important to have an official will drawn up so that the assets can be distributed as you would want them to be. Even if you only have one distant family member, a person that you have never seen before, they would end up with all of your assets if a will was in place. That’s why it is important to have one of these done so that the state does not get your property, and can be given out to those that are meaningful in your life.

You can find lawyers that will create a will for you. It will be officially drawn up and certified. Once that is done, you will not have to worry about where your assets will go. It’s a simple process that will only take a few weeks for them to prepare, and you can rest easy knowing, in the event of your death, all of your assets will be given to those that you would prefer distributing them to in the event of your death.

Important Benefits Of Estate Planning

While estate planning might seem like something you only indulge when you get old or ill, it is definitely not limited to these situations. Keeping in mind that accidents can happen in a manner of seconds, and nobody can predict the future, it is always recommended to have a proper estate plan in place. But what are the benefits of estate planning? And why should you consider getting it in place as soon as possible?

In Case Of An Accident

With estate planning, you choose someone you trust to handle your affairs in case something happens to you. For example, if you are involved in an accident that leaves you disabled or incapacitated, the individual you assigned can rightfully take over your affairs on your behalf.

In Case Of Death

If you invest some time in a comprehensive estate plan, you will be protecting your assets and property if you should pass away. For example, a court or creditor won’t be able to just seize your property or assets.

Protection For Those You Leave Behind

When you pass away, and you took the necessary steps with your estate planning attorney, those you leave behind won’t have to worry about paying income tax, capital gain taxes, as well as estate taxes.

Protecting Your Last Wishes

Thanks to the “no-contest” provision you are at liberty of implementing, you can prevent your estate from being challenged in court. This will also help to guarantee your last wishes are carried out the way you want.

Protecting Your Children’s Inheritance

If it happens that you leave a spouse and children behind, and your spouse gets married again to someone who also has children, an estate plan will ensure your children will receive the inheritance you left them.

Constructive Restraints

The thought of leaving a large sum of money to a young beneficiary can be stressful. However, with proper estate planning, you can place restraints on the money, meaning the beneficiary has to adhere to certain rules and decisions before receiving the inheritance. So, if you feel the young beneficiary won’t make wise decisions, you can help them in this regard.

Constructive Incentives

Just like you can protect a young beneficiary from wasting the money, you can give them an inheritance incentive if they make good decisions in life. At the same time, you can penalize a beneficiary who doesn’t.

Special Needs Beneficiaries

If you have a beneficiary who requires special attention, you can customize your estate to take care of them when you are not around anymore. Plus, the estate can be linked with government assistance as well, thus, giving them support from two different sources.

Peace Of Mind

Finally, with solid estate planning, you are taking care of your family. Even though it can never replace you, it will help them to carry on without having to worry about financial strains. In other words, it will give your family the peace of mind they deserve during a very tough time.

Don’t wait until you are old or ill to make arrangements for your estate. You never know what is going to happen in the next five minutes, and do you really want to leave your affairs in disarray if something were to happen?

Here is a video that goes more in depth on this subject:

The Probate Process Explained

Many people wonder what probate is and what happens during the probate process. In a nutshell, probate is how your assets are distributed after you die. Hopefully, you have a will in place. If you have a will, the court will review the will and distribute your assets. If you didn’t get around the writing a will, the court is going to decide who gets your assets.

Having a will is important because it makes it clear what is going to happen to your things after you die. There is little to no interpretation. If you didn’t have a will, things get a little murkier and your assets might not be distributed the way you want them to be.

During the probate process, some debts may be settled and titles transferred. If you had a will, the person you named as executor will go to court and start the process of dividing your property. If there is no will, your spouse or child will go to court and ask to be named as executor and they will begin the process of distributing the assets.

Once you go to court, you will have to file a petition and give notice to any potential heirs. If anybody objects to this, they can go to court to protest. You also have to publish this notice in a local newspaper. Once you get appointed by the court as the executor or administrator, you will have to give notice to all the known creditors of the estate.

Creditors have a certain amount of time to file a claim. An inventory of the estate will also need to be conducted and real estate will need to be appraised. If there are any claims, you will have to pay them from the estate. You can sell assets if needed to satisfy the debts.

Once creditors can no longer make claims on the estate, any titles to property can be transferred. If there was a will, the titles will be transferred to the people named in the will. If there was no will, the titles will be transferred according to intestacy laws. This means the spouse would be first, then children, siblings, and cousins. It goes on down the line until a suitable heir is found.

Having a will makes the process easier and less complicated. It can also make the process cheaper. You definitely want to consider a will, or even better a living trust. With a living trust, you can avoid the cost and time of the probate process completely. This makes your passing the most stress-free because you won’t have to deal with the courts.

Probate is a legal process and is supervised by the court. If you want to avoid the court getting involved, you need to set up a living trust. Probate can be costly and it isn’t private. A living trust allows for the private distribution of assets when someone dies and you don’t need to get the courts involved in the process.

What Is A Will?

In our first blog post, we feel like it is important to establish the basics of estate planning. The more knowledge you are equipped with going into the process, the better off you will be in the long run.

A will, commonly known as a “last will and testament,” is basically a legal document that states your final wishes. Wills are read by county courts upon your death, and are enforced by the same.

While it sounds simple on paper, it is important to have a perfectly written will so there is no chance for misinterpretation or malice. If your only possession is a house, and you only have one living relative who happens to be an adult, then your will process is probably incredibly easy. The complex nature of wills comes in when it comes to naming executors, guardians of children, paying taxes, and providing for any surviving pets.

We will get more into wills as our blog series continues, but we thought it was important to have this post up so our visitors can have a baseline of what to expect when they enter an estate planning consultation.

If you would like to learn a bit more about wills, please watch the following video!