Important Estate Planning Tips

Wills and trusts can be extremely complicated, especially when they relate to one another or feed off of each other. You can certainly have both tools as part of your estate  plan. Depending on your unique financial circumstances and personal preferences, it may make sense only to have a will. Moreover, there are some things that a will cannot do that a trust can, and vice versa. Are there ever situations where a trust can completely replace a will? Probably not.

Why Would I Want a Trust Instead of a Will?

The main reason that people prefer trusts instead of wills is that trusts  do not have to be probated, which can be an expensive and time-consuming process. It can also be difficult for your loved ones in some situations. A probated will is also a matter of public record, which may not be desirable for some people. For these and  and other reasons, some individuals choose to use an estate planning tool that will avoid the probate process -- a living trust.

When it comes to estate planning, many individuals believe that dividing assets equally among adult children is the best choice. However, there are situations in which leaving each child the same amount might not be practical. For this reason, it is important to know the difference between an equal inheritance and an equitable inheritance, in which each child receives a fair share based on his or her circumstances.

What is an equal inheritance?

In this situation, each child gets the same amount of the remaining estate after both parents have died.

This option works well when the needs of each child are the same, or the parents provided similar support to each child in the past. Moreover, each child must be mentally or emotionally capable and financially responsible.

There are many circumstances that can impact an estate plan, not the least of which is divorce. While ending a marriage is complicated, it is not only crucial to arrive at a fair and equitable distribution of the marital assets, but to preserve your estate as well.

Becoming a new parent is a life changing experience, and caring for a child is an awesome responsibility as well as a joy. This is also the time to think about your child's future by asking an important question: who will care for your child if you become disabled or die? The best way to put your mind at ease is by having an estate plan.

For many individuals, leaving a legacy of charity is an important component of estate planning, but there are many factors involved in creating a charitable giving plan.

First, it is important to select causes that you believe in such as environmental, educational, religious or medical, or those dedicated to providing food and shelter to the poor. The number of charities you wish to give to depends on your available resources, as well as other beneficiaries of your estate. Many people opt to limit their selections to a handful of charities that are most important to them.

Many individuals are aware that a will is one way to plan for the distribution of their assets after death. However, a comprehensive estate plan also considers other objectives such as planning for long-term care and asset protection. For this reason, it is essential to consider utilizing an irrevocable trust.

The most basic estate planning tool is a will which establishes how an individual's property will be distributed and names beneficiaries to receive those assets. Unfortunately, there are circumstances when disputes arise among surviving family members that can lead to a will contest. This is a court proceeding in which the validity of the will is challenged.

Settlement planning is a unique and expanding area of law that is designed to help individuals preserve benefits that have been received from a personal injury settlement, inheritance or judgment. The practice encompasses an array of legal services such as special needs planning, estate planning and financial planning. The objective is to assist clients with resolving claims and to create a structure to properly manage the funds.

Today, blended families have become increasingly common, and many individuals have step-children, that is, children of a spouse or partner. In situations where step-children have not been legally adopted, however, they do not have a legal right to an inheritance from a step-parent. For those who wish to leave step-children part of their estate , it is necessary to include them in an estate plan.

An individual who has been named as a personal representative or executor in a will has a number of important duties. These include gathering the deceased person's property and transferring it to the beneficiaries through a court-supervised process known as probate. In order to initiate this proceeding, the executor must first obtain what are referred to as letters testamentary. This document gives the executor the legal authority to administer the deceased person's estate.

In order to predict how much your estate will have to pay in taxes, one must first determine the value of the estate. To determine this, many assets might have to be appraised at fair market value. The estate includes all assets including real estate, cash, securities, stocks, bonds, business interests, loans receivable, furnishings, jewelry, and other valuables.

Once your net worth is established, you can subtract liabilities like mortgages, credit cards, other legitimate debts, funeral expenses, medical bills, and the administrative cost to settle your estate including attorney, accounting and appraisal fees, storage and shipping fees, insurances, and court fees. The administrative expenses will likely total roughly 5% of the total estate.
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