Estate planning is the preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death. The planning includes the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law. Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death. It also takes into account the management of an individual’s properties and financial obligations in the event that they become incapacitated. Assets that could make up an individual’s estate include houses, cars, stocks, artwork, life insurance, pensions, and debt. Individuals have various reasons for planning an estate, such as preserving family wealth, providing for a surviving spouse and children, funding children’s or grandchildren’s education, or leaving their legacy behind to a charitable cause. • Limiting estate taxes by setting up trust accounts in the names of beneficiaries Wills In Estate PlanningMost people don’t know it, but they have an estate. An estate is simply the sum of your possessions at a given point in time during your lifetime or when you die. It can consist of your house, car, jewelry, stocks, bank accounts, life insurance and other professional or personal interests. Some estates are worth a lot more than others, of course, but large or small, most Utahans have one. The most basic, and likely the most well-known, estate planning instrument is the last will and testament. This document details your wishes regarding the distribution of your assets. In short, it specifies who gets what when you die. If you die intestate, without a will, the state steps in and decides how your estate will be handled. For your own peace of mind and the welfare of your heirs, it’s best to leave a will behind. This way, you’re more assured that others will handle your estate according to your wishes and not the state’s laws. While a valid will takes precedence over state laws, it will not keep your estate out of probate. Before a judge enforces a will, the court must first determine that it is, in fact, the decedent’s final instructions. The executor has to file the will in court and inform all known beneficiaries that the probate process has begun. Then the executor or his/her attorney must place a notice (or several notices) in a local paper. This will give creditors and unknown heirs a chance to step forward and stake a claim on your estate. A probate can be time-consuming and costly. Worse, it is only at the end of this process that your heirs can access the assets you left behind. Revocable Trusts In Estate PlanningTrusts keep your estate out of probate and your private affairs beyond the public scrutiny of prying eyes. There are different types of estate planning trusts you can use. The revocable living trust is the most commonly used trust for estate planning purposes. The assets you place in this type of trust go directly to the named beneficiaries without passing probate. You can be both grantor and trustee of such a revocable trust. It is also referred to as an inter vivos trust. You retain control over the assets even if, technically, you no longer own them – the trust does. Because you still control the assets in a revocable trust, they may be considered in the valuation of your estate. They will skip probate but will likely include living trust assets in figuring out the estate tax your heirs have to pay. Majority of Utahans estates will likely not end up having to pay estate taxes. The current exemption is at $5.45 million per individual, twice this for married couples. As a rule, if you pass on with an estate that’s worth less than this amount, no estate taxes are due. Estate Planning With An Irrevocable TrustIf your estate exceeds the exemption, a wise strategy is to use an irrevocable trust to hold your estate assets. The terms of an irrevocable trust cannot be changed once it has been set up. Therefore, as grantor, you no longer control the assets in an irrevocable trust. That is now a task that falls on the trustee. Assets in an irrevocable trust are exempt from probate and are not part of the valuation of a decedent’s estate. This could mean substantial savings in terms of estate taxes for your heirs. A Medicaid Trust is a power irrevocable trust into which you can convey assets. Once you do, you can become eligible to have the government cover 100% of nursing home costs. Estate Plans Need A Living WillSound estate planning should also make provisions for your care in the event you’re unable to do so yourself. Towards this end, you need to have a health care declaration, also known as a living will. This gives someone you name (and trust) the power to make healthcare decisions on your behalf if you become incapacitated. You may already have made your wishes known to your spouse or adult children. But if you don’t have it down in writing, the state could intervene and a legal mess can ensue. This at a time when your family cans least affords to deal with one. Along the same vein, it’s prudent to give someone power of attorney over your financial affairs. This could already be the trustee or your financial advisor, but again, this has to be in writing. When you inform them of the task you’re asking them to perform for you, make your wishes clear. Understandably, this could be a difficult and emotional conversation. But, if you want your wishes to be honored, it is a conversation you must initiate. When you can no longer make decisions for yourself, the people you want on your side are those you can trust to carry out your wishes. You Should Have Insurance In Your Estate PlansLife insurance is often included in carefully thought-out estate planning checklist. Life insurance benefits can provide continued income for your loved ones at your death. An estate planner typically advises creating an irrevocable life insurance trust (ILIT) to hold a life insurance policy. This can be especially prudent if you know you’re leaving behind an asset-rich but cash-poor estate. Your estate may consist of priceless heirlooms and antiques that place it well outside the current exemption. In this case, it makes sense to create an ILIT to hold your life insurance policy. Since trust assets are outside probate, your heirs will have access to the life insurance benefits sooner. They can then use some of this money to pay for any estate taxes that become due. Life insurance is not the only type of insurance you should include when planning your estate. Consider taking out disability income insurance. This can replace your income if you’re suddenly injured and can no longer work. There is also long-term care insurance to help pay for your care in the event of a prolonged illness. The more safety nets you have, the greater your chances of not hitting the ground with a crashing thud. What About Bank Accounts and Beneficiaries?Make sure you have a beneficiary for your bank and retirement accounts and that this is kept current. Naming a beneficiary automatically makes these types of account ‘payable on death’ to the beneficiary. If the beneficiary is an ex-spouse or deceased, your present heirs will have a tough time accessing the funds. Worse, this can result in your estate having to go through probate, which would cause additional delay. Stocks and brokerage accounts can be registered as well so they transfer to your named beneficiary upon your demise. Keeping your list of beneficiaries current can be easily overlooked. However, something as simple as this can cause major problems for your heirs down the road. As your life circumstances change, your plans for your estate could evolve as well. Keep in mind that laws that impact estate planning can change too. An experienced estate planning lawyer or professional can prove to be invaluable in terms of keeping up with these changes. This is all the more true if your estate plan includes offshore trust vehicles. By Now You Know The Importance of Estate PlanningEstate planning helps an individual to decide how his/her assets will be managed and owned after their death or incapacitation. It is a tax-proficient, easy way of transferring the assets to the family. Below lists reasons that estate planning is important: The tangible assets in an estate may include: Estate Planning Lawyer For AssetsWhen you need legal help with estate planning for your assets in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
The post Assets In Estate Planning first appeared on Michael Anderson.
4.9 stars – based on 67 reviews
West Valley City Utah Divorce Attorney Utah Pornography Distribution Cases Best Salt Lake City Utah Estate Planning And Probate Attorneys Is It Worth It To File Bankruptcy? How Do I Reconnect With My Husband During Separation? Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Michael Anderson https://www.ascentlawfirm.com/assets-in-estate-planning/
0 Comments
Leave a Reply. |
Probate LawyerProbate Lawyer in West Jordan Utah. If you need probate lawyer, trust attorney, inheritance counsel, living trust, last will and testament, call 801-676-5506 now for a free consultation. Archives
April 2023
Categories |