The Nitty-Gritty of Estate Planning
Estate planning can be metaphorically equated to the process of building a chute that will smoothly transfer the assets of person to his children and other beneficiaries in the event of one’s death. There is a common notion that estate planning is generally done by rich and wealthy who have plenty of cash, property or valuables to leave behind for their loved ones. But that is not true, estate planning is mandatory for all, irrespective of their financial standing. It not only transfers assets to your beneficiaries but also reduces the taxes on your property. Asset can be a whole range of things that you own. Run an audit and you will stunned at the size of your assets.
An important factor of estate planning is the element of will. In the current scenario, we see numerous cases with widespread litigation and media coverage if no living will is prepared by property owners. Almost all estate planning attorneys advise clients to create a living will. Even whether the said person will prefer to be buried or cremated, is specified clearly in such legal documents.
A will is very important estate planning devices because it states the details of who owes what section of a property and the authority he is going to hold on other aspects of the estate. A will is considered as an organization that holds responsibility of dividing a property among the family members or to its rightful heirs. It is the will that acts as a trust which helps to win a legal battle when no process works in property division issues.
Besides the will you require a durable power of attorney and a health care proxy. These days you have the facility of software to do it effectively. There are set of questions that you have to answer, which gives your attorney all the required information, It saves you time and billable dollars. But if you are creating documents through the software always make sure that the attorney reviews them properly.
You have to get the will notarized with required number of witnesses. This number varies from state to state. A will should not contain the sign of a beneficiary as a witness.
Always review the plan in the incidents of divorce, demise of a spouse, adoption, birth of a child, relocating to a new state, inheriting a property, getting married or remarried.
An estate plan should contain a list of all your assets and all your liabilities. The liabilities have to be paid after your death. The inheritors will get what is left after paying the administrative and probate costs.
You have to nominate an executor who will have the management of the estate after your death till the assets are distributed. This is a big onus, so make sure the person is capable and reliable.
Keep only one set of document signed. You will get duplicate copies that you can put inside your file. Review the estate plan after every few years to see it is compatible with the present laws.