What Is Estate Planning?

Estate PlanningEstate Planning In A Nutshell

Most of the clients we work with in our practice are looking to do some type of estate planning. This begs the question: what is “Estate Planning?” In a nutshell, estate planning is the process of planning for the orderly administration and disposition of assets after the owner or owners die. If an individual has no estate planning, his or her assets will eventually get distributed to the intestate heirs, but that distribution may run counter to the desires of that individual. In our practice, we have found that having an effective, carefully tailored estate plan can help deal with aging and make the eventual transfer of your estate easier, accurate, and cost-effective for you and your loved ones.

 

When thinking about estate planning, the first question many people have is whether to have a will or a living trust. A will is a document that states how you intend for assets to be distributed upon your death. Although it is considered a legal document, a will has no legal authority of its own and must be formally entered into and processed through the local Probate Court in order for it to gain full legal status for purpose of administering your estate. This is the court-supervised process people often depressingly associate with the word, “probate.

 

Unlike a will, a living trust is a legal entity that comes into existence the day you sign the trust document. From that day on, your living trust will own all the assets you would have previously owned as an individual or as a couple, jointly with right of survivorship. If you become incapacitated or die, the co-trustee or successor trustee of your living trust will be able to continue management of the trust assets either for your benefit or the benefit of the new beneficiaries without having to enter Probate Court.

 

In addition to avoiding probate, a living trust can accomplish substantial savings on estate taxes, can continue to be operate and provide you assistance should you become disabled or incapacitated, and can remain totally private so that no one knows your business except those persons that you want to have knowledge of your personal and financial affairs.

 

For the reasons mentioned above, a living trust is the optimal estate plan. Even if a living trust is too advanced or costly for your needs, each individual, at a minimum, should have a will, power of attorney, and advanced directive to physician as a basic level of estate planning.

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