Estate planning involves distributing your assets after death to such people or causes according to your wish with minimum legal complications and the least tax incidence. And estate planning is not just for the wealthy; nor is it something to be contemplated when you reach the ripe old age of eighty.
Anybody, irrespective of age, with considerable assets and the desire to provide for dear ones even after death would be doing a great service by planning one’s estate. And the best time to plan your estate is now when you are still alive and have the requisite mental health to make rational decisions. An estate plan made during an illness affecting contracting capacity can be challenged, complicating matters for beneficiaries. Remember, death or a debilitating illness affecting your legal capacity to contract might strike you any day; therefore, you should prepare for that eventuality beforehand.
The first step in planning your estate is to take stock of all your material possessions (technically referred to as ‘estate’), and then determine their value. Typical items comprising the estate include: house(s) and land; bikes, cars, planes and boats; cash-in-hand; savings accounts, pension accounts; certificates of deposits; stocks, bonds, and mutual funds; insurance and annuities; employee benefits; jewelry, furniture, art collections; ownership rights/interests in businesses; and claims against others. Mind you, the list is not exhaustive and your debts and obligations to others are also a part of your estate.
Next, line up the details of your beneficiaries – names, addresses, and ages. In addition, you should determine who should be the trustees/guardians in case the beneficiaries are minors at the time of planning the estate. Also, you must identify an executor of the estate. It would be easy if you line up pre and post nuptial agreements, divorce decrees, previous wills, deeds of real estate property, and latest tax returns before you consult a professional estate planner.
Though small estates might be easy to plan, it is advisable to take the help of professional estate planners, including attorneys and CPAs, to explore all the possibilities to reduce tax incidence.
Remember, estate planning is not a one-time affair. Any change in your marital status, death of beneficiaries, a birth of a child, or changes in the law will require a review of the plan.
Estate Planning provides detailed information on Estate Planning, Estate Planning Attornies, Will Estate Planning, Estate Tax Planning and more. Estate Planning is affiliated with Filing Chapter 11 Bankruptcy.