Estate Planning Resources
Often, people feel that estate planning is for the very wealthy, or that it isn't necessary until a person advances in age. The fact is, however, that estate planning should begin as early as possible. But where should you begin? Strauss & Troy provides some resources to help you get started:
Common terms
Wills
A will is a document that describes how, to whom, and when you want your assets to be distributed upon your death. A will also enables you to—
- Name an executor who will administer your estate upon your death
- Designate guardians for your minor children
- Identify beneficiaries and the assets you wish to pass on
- Make gifts to charities or other organizations
- Control the impact of estate tax
Trusts
A trust is a legal arrangement established by a person who wishes to provide assets to a beneficiary. These assets are managed by a person called a trustee. Some types of trusts are—
- Living trust—set up and in effect while you are alive
- Testamentary trust—set up as part of a will and in effect upon your death
- Revocable trust—can be altered after it is in effect to terminate the trust, add or remove assets, change the beneficiary, and more
- Irrevocable trust—cannot be altered or revoked after it is in effect; generally used for gifting purposes
- Life insurance trust—established to own a life insurance policy, generally used to transfer life insurance proceeds to a beneficiary free of estate tax and irrevocable
- Credit shelter trust—used by a married couple to take advantage of both spouses' credits against the federal estate tax
Living will
A living will is an advance directive. When you sign a living will, you state in advance your decisions about your own medical care if you are someday in a terminal condition or a permanently unconscious state.
Medical power of attorney
By naming a medical power of attorney, you are designating the person you wish to act as your decision maker in the event that you cannot make your own medical decisions. It is wise to name more than one successor, should the first person named become incapacitated.
Probate
Probate is the process of settling the estate of a person who has died. Once a will has been probated in a court of law, it is deemed to be authentic, and disposition of the estate can be settled according to the instructions of the deceased.
Intestate
When a person is said to have died intestate it means that the person died without a will or other legal directive declaring the person's wishes regarding distribution of his or her assets—or estate. This results in a complicated and time-consuming legal process in which the legal system makes decisions about the distribution of the person's assets.
Estate planning and administration
This terminology describes the essential planning and drawing up the legal documents that will enable you to manage your assets before and after your death or disability.
Marital deduction tax planning
The marital deduction enables a person to transfer assets to the person's spouse free of gift and estate tax. An estate planning attorney will help you take advantage of the opportunity provided by the marital deduction.
Charitable transfer planning
If you wish to make lifetime or post-death gift to charity, an estate planning attorney will help you explore the various options available to you.
Planning for special needs
Providing for a family member with special needs can be complicated. An estate planning attorney can provide guidance.
Lifetime gifts
A lifetime gift is a financial gift made during your lifetime. It must meet IRS requirements and offers tax benefits to giver and recipient.
Trust administration
Living trusts are created to avoid the expense and hassles of probate upon a person's death. Living trusts direct the trustee about how to hold, manage, and distribute the trust assets during the grantor's lifetime and after the grantor's death.
Prenuptial agreements
A prenuptial agreement is made between two people before they marry. It details how assets will be distributed when the marriage ends in divorce or death.
