What is Estate Planning?
Estate Planning is preparing for the orderly transfer of everything you own at your death. In short, it is legally arranging to give what you have to those who you want to receive it. It can also include when and how you want them to receive it.
Without Estate Planning, your family will have to go through the probate court in order for your assets to be transferred. Also, without such preparations, you will have no say in who your assets are transferred to or who is responsible for administering your estate.
Estate planning allows loved ones to receive your assets with less:
- Court costs
- Legal fees
Estate planning is also preparing for the possibility of incapacitation by appointing an agent to make any financial and medical decisions on your behalf. Almost every complete Estate Planning portfolio includes preparations for the possibility of incapacitation and arrangements for the transfer of assets upon your death.
Who Should Plan?
Nearly everyone, single or married, has assets and desires to determine how they will be managed in the event of incapacity or death. Estate Planning is one of the most thoughtful and considerate gifts you can give your family to help ease the pressures and demands of administering your estate. Estate planning is especially important if you:
- Have a minor or a special needs child or grandchild.
- Want to avoid probate costs.
- Want to control how your assets will be transferred and managed upon your death.
- Want the transfer of your assets to be a private matter.
What if My Estate is Not Very Large?
You should still plan. Otherwise, your estate will likely go through the probate court. This process can be expensive and will allow the state to determine who will receive your assets.
How do I know If I Need Estate Tax Planning?
The federal tax allows each of us a tax credit to protect a portion of our estate against the inheritance tax. In 2013, any individual can protect about $5 million of their estate.
For larger estates, there are additional legal techniques for management and transfer of assets to heirs in ways that minimize the taxes.
How Much Will my Estate Planning Cost?
Planning discussions and the preparation of Estate Planning documents generally costs between $500 and $2,500 depending on the complexity of your estate. Estate Planning documents have significant legal and tax consequences. You should consult a qualified, experienced estate planning attorney who can customize a plan to meet your personal goals and objectives.
When Should I Plan?
No one likes to think about their own morality or the possibility of becoming incapacitated by a stroke or dementia for example. This is why so many families are caught off guard. You can only plan your estate before these events occur. Estate Planning is one of the most thoughtful and considerate gifts you can give your family.