An estate plan is a collection of documents and includes a will, guardianship designations, health care powers of attorney, beneficiary designations, permanent powers of attorney, and a personal letter of intent, describing your wishes, should you die or become incapacitated. Estate planning covers the transfer of assets at the time of death, as well as a variety of other personal matters, and may or may not involve tax planning. The basic document that is most associated with this process is your will. The estate planning process includes different documents, including a will and various types of trusts.
Each of these instruments does specific things. Wills and trusts have limited power, which means that a will cannot do what a trust can do and a trust cannot do what a will can do. Knowing the difference between these legal documents will help you create a clear and complete estate plan. A will provides its instructions, but does not prevent the legalization of inheritances.
A will only indicates how the assets titled in your name will be distributed without the designation of a beneficiary or other government contract. The assets must still go through your state's probate court before they can be distributed to their intended beneficiaries. If you own a property, usually real estate in other states, several successions may be required, each in accordance with the laws of that state. It can also take anywhere from a few months to two years or more.
With some exceptions, inheritance proceedings are open to the public and your creditors and excluded heirs receive notification of their opportunity to request payment of a debt or a portion of their estate. In short, the judicial system, not your family, controls the process and schedule of distributions to your beneficiaries. Estate planning is the process of designating who will receive your assets in the event of death or disability. Often done with the guidance of an attorney, one of the objectives is to ensure that heirs and beneficiaries receive assets in a way that manages and minimizes wealth taxes, gift taxes and other fiscal impacts.
Once the estate has been inventoried, the value of the assets has been calculated, and taxes and debts have been paid, the executor will request the court's authorization to distribute the remainder of the estate to the beneficiaries. Another good reason to have an estate plan is to minimize the probate process and its expenses, delays and loss of privacy. Estate planning isn't just for the rich either, although people who have accumulated wealth may think more about how to preserve it. An experienced estate planning lawyer can provide you with critical guidance and the peace of mind that comes with knowing that your documents are properly prepared to meet your objectives.
If you're looking for more information or legal advice, see FindLaw's directory to contact an estate planning lawyer. You don't need to be rich, or older, or even have a specific amount in your bank account to justify the need for a valid wealth plan. Contact a qualified estate planning lawyer to help ensure that your loved ones are cared for and their wishes are met. Estate planning is the preparation of tasks that serve to manage a person's asset base in the event of disability or death.
There are many parts of estate planning, but the first thing you should do is conduct a thorough review of your wealth assets. Many people think of estate planning as a process that must be done to prepare for what happens when you die. Participating in estate planning can be an important activity at various points in your life; there is no ideal age to start the process. It used to be that properly preparing the types of documents contained in an estate plan could cost you thousands of dollars.
Estate planning is an ongoing process and should be started as soon as a person has a measurable asset base. Estate planning is a general term that encompasses many different documents, including wills, trusts, power of attorney (POA) and beneficiary forms, all intended to determine what happens when you die or are unable to make decisions for yourself. Estate taxes are levied against the estate itself, while inheritance taxes are charged directly to the person who inherits them. .