An estate consists of all property owned at death before it is distributed by will, trust, or the state’s laws (referred to as intestacy laws). An estate may contain both real property (real estate, including houses and investment properties) and personal property (all other property, including bank accounts, securities, jewelry and automobiles).

Yes! It is highly recommended that you have an estate plan.  Estate planning allows an individual to specifically determine who will receive or inherit money or property from your estate, and to what extent. It also allows you to manage your tax liability concerning your estate.

Yes! A will can be part of your estate plan. A will allows you to determine who will receive your assets, or whether certain individuals should be prohibited from receiving any of your property. A will also designate a person who will be responsible for winding up your affairs.

If you have minor children, a will allows you to provide a plan for their care in the unfortunate circumstance that you pass while they are still minors. Additionally, a will can often allow your surviving heirs to avoid the probate process, which can be lengthy and complex. A will also avoids estate taxes. The amounts that you bequeath to your beneficiaries or heirs will not be counted toward your final estate tax accounting.

A person who dies without a will is referred to as dying intestate. Each state has intestate laws that set forth how a deceased person’s assets will be distributed to family through the probate process, regardless of what you may have wanted.

Probate is the process used by courts to enforce the provisions of a will and settle any disputes regarding the decedent’s estate. After an individual dies, the person named in his or her will as executor will file papers with the court informing the court that the individual has passed. If there is no executor named in the will, the court will appoint someone to take on the role of executor. Next, the executor must prove the veracity of the individual’s will and provide the court with an inventory of the decedent’s property and debts, as well as a list of people who are named in the will as beneficiaries. A beneficiary is someone who is provided with a gift in the will.

 

Also, probate is a public process that can be lengthy, costly, complex and emotional for your family.  If you do not want your family to be subject to that, you may want to avoid probate.

You can avoid probate by creating a trust instead of a will.

A trust is a written document that places your assets into a trust for your benefit during your lifetime and that provides for the transfer of those assets to a specified individual or individuals upon your death. Unlike with a will, legal title to the identified assets is placed in the trust. The beneficiary will appoint a third party to serve as the trustee of the estate. The trustee is responsible for managing the trust’s assets and seeing to any transfers that are necessary upon the beneficiary’s death or incapacitation.

One of the most attractive benefits of a trust is that they do not require probate.  A trust is private and not public like a will.  Upon death, a trust can be activated immediately, and your beneficiaries can have access to what you left them sooner than they would with a will. A trust can also provide financial stability to your beneficiaries.

A living will or advanced healthcare directive details your wishes regarding medical treatment if you become incapable off expressing them yourself.  It ensures that someone is appointed to speak on your behalf and will make enforce your decisions of make decisions for you. Many people think that these options are only for the elderly, but even young persons should consider making some provisions for their health care and the distribution of their assets. An advanced healthcare directive is also called a living will.

A power of attorney is a document that grants a specified individual the right to act as the grantor’s attorney in fact or agent should the grantor become incapacitated. A power of attorney can become effective upon signing or can “spring” into effectiveness when the grantor becomes incapacitated.

A guardianship is a legally recognized status that is typically used when an individual can no longer make sound or safe decisions regarding the care of his or her person or property or has become exposed or susceptible to undue influence and fraud. To appoint a guardian, an individual must make an application to the court that provides a detailed and thorough explanation of the events or concerns necessitating the appointment of a guardian.

It is possible to provide for your pet through a will and through a trust (pet trust).