The Truth About Estate Planning (Wills, Trusts, and Probates)

The Truth About Estate Planning (Wills, Trusts, and Probates)

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To ensure that your estate planning goes smoothly, you must understand the basic laws. This post will also correct some common misconceptions perpetuated by the media to consumers. Whether you have a small estate or a large estate, it is critical to know this information so your estate is passed down to the next rightful owners.

You don’t have to be rich

Estate planning isn’t only for the rich. The tax issues talked about by attorneys and financial advisers usually only affect people with estates valued over one million dollars. The act of estate planning is important for everyone since it involves the passing down of health care and assets in the case of the estate owner’s incapacitation or death.

Never too early to start planning

You are not too young to start estate planning. If you’re of a legal age and have any assets or property, then estate planning is still important. You can’t predict when you will die or if you will ever become medically incapacitated.

Create a will

If you don’t have a will, the state can take your assets. Become familiar with your state’s “laws of intestacy” as they vary state by state.  These laws determine who gets what. You should still draft a will to ensure that the right people get your assets.

No substitute for true asset protection

Estate planning by itself does not offer true asset protection like homeowner’s liability insurance and auto insurance do. Most states classify a family trust as “transparent” meaning that the assets are still vulnerable to business losses and lawsuits. To give your assets real protection, you must hire a specialist.

Trusts won’t stop estate tax obligation

Most family trusts won’t remove your estate tax obligations. To help reduce or eliminate estate tax liability, you should seek out other legal strategies and advice.

Trusts may help you avoid probate

The main differences between a will and a probate is that a will is subject to probate, and the will can also be contested, resulting in a long and costly legal battle. In some cases a trust can be used to prevent this from occurring.

Trusts give more privacy

The probate process is a public record. This is because probate court proceedings are public knowledge that can be found on any computer. This includes the specific property, the specific heirs and their addresses. This opens them up to buying offers and harassment.

Find a qualified lawyer

Talk to a qualified lawyer to ensure that your loved ones are taken care of once you’re gone, and that you will be taken care of in case of an incapacitating medical condition.

Image credit: New-city-Rockland-County-NY-estate-planning-attorneys by Albert kaiser, on Flickr

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Categories: Estate Planning

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