What is Estate Planning?
Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence. An estate plan may consist of documents such as a Trust, Last Will and Testament, Durable Power of Attorney, Living Will, and Designation of Health Care Surrogate. Though often overlooked or put off in favor of more immediate concerns, a comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies: What is the state of their financial affairs? What real and personal property do they own? Who gets what? Does a personal guardian need to be appointed to care for minor children? How much tax will need to be paid in order to transfer property ownership? What funeral arrangements are appropriate?
What is an “Estate”?
Quite simply, your “estate” consists of all property owned by you at the time of your death, including:
How Can an Estate Plan Help?
Regardless of your age, or the size and complexity of your estate, an estate plan can accomplish the following:
What is a Will?
A will is a legal document that lets you designate who should receive which of your assets after your death. It also allows you to name guardians for any dependent children. Without a will, the courts decide what happens to your assets and who is responsible for your kids.Dying without a will – known as dying “intestate” – means you have no say over who receives your assets, and can leave your heirs and the court system the complex and costly job of wrangling over who should get what.
What is a Living Will?
A living will is a legal document that allows you to express your wishes to doctors in case you become incapacitated. In a living will, you can outline whether or not you want your life to be artificially prolonged in the event of a devastating illness or injury.A living will is often combined with the designation of a ”health care surrogate,” which allows you to designate someone to make health care decisions for you if you become incapacitated.
What is Probate?
Probate is a term for the legal process that occurs after a person dies. If you die having drafted a will, the probate court system must first validate that the will is authentic, and then proceed to distribute the estate among the heirs according to your wishes. When a person leaves no will, the probate court must decide, according to the laws of the state, who gets what. Upon you death, how your assets are distributed can be stated simply -if you have no will, you have no say.
What is a Trust?
Not many people understand what a Trust is and how it differs from a Will. There are many types of Trusts, but the one main benefit of all Trusts is how they will keep your estate out of probate after your death.The main difference between a Trust and a Will is the fact that in a Trust your property won’t go through probate when you die. During probate much of the estate can taken by taxes and sometimes attorneys. When you create a Trust you transfer your properties to it while you are still alive, and it continues on beyond your death. Not to oversimplify it, but a will directs the distribution of your assets upon death; and a trust can protect your assets while you are living, and after your death.
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