Estate planning is a process where you make arrangements for the transfer of your property after your death. Estate planning typically involves a Will, a Health Care Directive, and a Power of Attorney. A Will distributes your property to chosen beneficiaries upon your death. The Will can designate a guardian for your minor children, appoint a trustee to manage finances, distribute your property, and much more. A Health Care Directive is an instrument that specifies your wishes regarding medical treatment in the event you are no longer able to communicate for yourself, such as whether you want artificial nutrition, life support services, and types of funeral or burial arrangements. A Power of Attorney is a document that appoints your “attorney-in-fact” to handle your property and finances.
Your estate consists of all of the property you own at the time of your death. This could include your home, land, jewelry, cars, bank accounts, securities, stocks, pensions, trusts, tangible items, and more. Certain items of your estate can be distributed through your Will. They will otherwise be distributed through intestacy laws that distribute your property to your decedents (typically next of kin) upon your death.
Probate is the Court process of transferring certain assets in accordance with your Will. Your estate is made up of probate assets and non-probate assets. Non-probate assets are property that transfer to others through title or contract, such as retirement assets or life insurance. Upon the death of a loved one, you should contact your attorney immediately to discuss settling the estate and probate.
Absolutely! You can even make it possible to leave money for pet expenses in the care of the person who will be taking the pet.
Yes. There are three types of estate taxes. An estate tax (inheritance tax) is a tax on your right to the property (your gross estate) at your time of death. Once your gross estate is calculated, federal law allows for certain deductions on the “taxable estate”, such as administrative expenses, funeral expenses, contributions to charitable organizations, and certain bequests made to surviving spouses. You should consult your attorney to determine your exact tax obligation for your situation.
Your Will cannot transfer non-probate property, such as property already passing through beneficiary designation or a contract. For example, real estate owned with rights to survivorship will pass automatically to the surviving owners regardless of what your will says. Similarly, IRA’s or insurance policies with named beneficiaries will transfer to your named beneficiaries. It is important to ensure that your beneficiaries are up-to-date.