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In what ways does an estate plan protect my heirs?

If you die without a will, which is a vital part of an estate plan, the courts will decide who gets your assets. Without direction, the process of probating your estate can take years, and the costs can eat up much of the estate. The strain on your heirs is immense, and can become ugly, and the state also becomes a contender for these assets. And the assets are not available to pay for funeral and other subsequent costs of settling your estate. An estate plan should be considered as a necessity, not an option.

Does an estate plan identify arrangements for minor children?

An estate plan is vital to arrangements if you have young minor children. It will designate who will become the legal guardian for your children, and how your assets will be provided to them as they grow up and become adults. Without this direction, courts who know nothing about your children will make these decisions, including who will raise your children. No one thinks about dying young, but if both parents pass away while your children are under 18, an estate plan is the best legacy that you can pass on to them.

How does estate planning help with taxes?

A large part of estate planning is reducing court actions and taxes on your estate. Income taxes, estate taxes, and inheritance taxes can be reduced substantially through proper estate planning. Essential to estate planning is transferring assets to heirs with an eye toward creating the smallest possible tax burden for them. Estate planning can enable couples or individuals to reduce much or possibly all of their federal and state estate taxes and state inheritance taxes. There are also ways to decrease the income tax beneficiaries might have to pay. Without a plan, the amount that your heirs will owe Uncle Sam could be quite a lot. Also addressed in estate planning is ownership of investments and businesses.

How can we avoid fights between heirs regarding our estate?

The best way of stopping a fight is preventing it before it begins. Estate plans allow you to make decisions as to who will receive what in your estate, and even provide written explanation for the decisions if you choose. These plans can also create an opportunity for you to initiate discussions with your heirs about what your estate plan includes. And you can decide who among your heirs should have responsibilities placed upon them for the oversight of distribution of the estate. It also will help you make individualized plans, if necessary—to arrange for a child with health problems or to set up a trust for one who might be better off not inheriting a lump sum. It can also help you give more to the child who did most of the work of caring for you in your later years or less to the one whose extensive education you funded while paying far less for their siblings. Or perhaps dividing your estate equally is the best decision. These are things that need to be thought through and converted to paper in the form of estate plan documents.

What Happens if I Die Without A Will?

The term for dying without a will is “intestate.” Every state has laws of descent and distribution that will determine who receives your property by default. Typical distribution would be to your spouse first, then to your children, or if there are none, to other family members.

Can I leave money to a charity?

You have the right to leave money to a charity, or several charities if you wish. There can be taxes or exceptions that do apply, make sure that you seek advice on these in establishing your estate plan.

What happens if there are disputes regarding the terms of my trust and will?

Trusts are governed by state law, and disputes will be decided by mediation or in court. The primary factor in initiating a dispute would be for the party bringing suit to demonstrate that they have “standing,” meaning that they have a personal interest in the outcome of the terms of the trust and will, either financial or beneficial. Independent third parties without standing have no right to contest or dispute a trust or will.

What do I do after the death of a family member?

Losing a family member is one of the most difficult and challenging experiences that someone can endure. Although it may be the last thing you want to have to do, someone must take the initial actions to deal with the decedent’s estate. Some of the first actions to be taken are:

1. Obtain a legal pronouncement of death. A doctor or medical professional usually performs this. If your loved one dies at home, you can call 911. Unless there is a “do not resuscitate” document, the paramedics will engage in life-saving measures. Or you can transport them to an emergency room.
2. Notify the decedent’s family physician and the county coroner.
3. Close friends and family should also be notified of your loved one’s passing.
4. If the individual was working at the time of his or her death, it is a good idea to notify his or her employer and make any inquiries necessary regarding the payment of benefits.
5. If the individual had a life insurance policy, it is also a good idea to contact the policy issuer.
6. If the decedent has any minor children or pets, you will need to arrange for any care or supervision necessary. If the decedent died with a will or trust, there may be instructions regarding the care of any minors or pets provided in the document.
7. If the decedent has an Estate Plan or Trust in place, working with the family Attorney or Executor will aid greatly in these highly sensitive and critical matters.
8. As an additional reminder, no one expects you to be superman in these instances, take a little time to be human and feel your own emotions, and find others to help you with the tasks that are needed to be performed.