Estate Planning Tips

Throughout our lives we save, accumulate assets, make hard financial decisions and, some day, hope to end up with an estate big enough to nourish our retirement, and, if we do a really good job, be able to leave a legacy for our children. That's the mindset of most Americans and, yet, many people do little in the way of planning to ensure that their estate is passed on in the way they desire. Estate planning is not just for the very wealthy. Absent a well thought out plan, a person can leave behind more hardship than legacy as probate and estate distribution laws can wreak havoc on even the simplest of estates.

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What Happens to Your Estate After You’re Gone

After a person dies, his or her estate becomes a matter for the court. For many estates, there are settlement costs like probate fees, and some estates may be subject to death taxes. Larger estates can be subject to substantial taxes, as much as 55%, which could require the liquidation of assets in order to pay them. There are plenty of horror stories of family businesses or farms that were devastated through forced liquidations.

In addition, the distribution of assets and capital that could be sorely needed by your heirs, are likely to be tied down by probate proceedings to determine any if there are any other legal claims to the estate. When a person dies intestate (no will), everything from the distribution of assets to the assigning of guardians for minor dependents could be left up to the state. It would reasonable to think that, no one in their right mind would want that for their family, however, it happens every day.

Planning your estate is one of the most important financial decisions you can make as it will impact a lifetime of hard work and accumulation with direct consequences for your surviving family and heirs. Without a plan, you can be assured your family will have the last say in how your financial wishes are carried out. A well-planned estate can minimize all of the problems and pitfalls that come up when it goes to settlement and will put you and your family in total control.

Benefits of an Estate Plan

  1. Your wishes and intentions will be communicated and honored
  2. The financial security of your family will not be in jeopardy
  3. Ensures the capital needed for paying immediate settlement expenses
  4. Keeps assets out of probate proceeding
  5. Optimizes the estate by keeping taxes and expenses low
  6. Ensures that your assets are transferred to your designated beneficiaries
  7. Keeps your estate proceedings private
  8. Allows you to benefit a charitable organization if you desire
  9. Can protect an ongoing business or concern from liquidation
  10. Can expedite the settlement of your estate with less legal entanglement

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Basic Estate Planning Tips

Get a Will:

Just do it. At the very least, it communicates your intentions and wishes, and, if you have any dependents it legally establishes guardianship and an executor. If you don't do it, the state will draw up your will. In most states, a simple will can be invoked simply by having a witness attest to it with a signature.

Get a Living Trust:

A trust is a form of ownership, created by you, that will hold title to your assets before they are distributed. A named trustee must, by law, distribute the assets according to the provisions you set forth in the trust. A living trust will allow your assets to pass outside of probate ensuring their swift distribution. Any income earning assets can be managed by the trustee who then passes the income onto your heirs. A living trust can reduce or eliminate probate expenses, however, it doesn't do anything to shield your assets from potential taxes.

Choose the Right Title:

Assets, such as houses and investments, can be titled in ways that will have an impact on how they are transferred. The most common form is joint tenancy which enables an asset to transfer immediately, without interference, to the surviving joint tenant. In community property states, where assets are automatically titled as community property, it would require that you change the title to joint tenancy. The difference in these titles is mostly a concern if your estate is large enough to incur significant death taxes.

Asset Transfer by Contract:

Some assets such as qualified retirement plans and life insurance are transferred by contract, outside of probate, to a beneficiary named in the contract. It is important to review your beneficiary designations periodically and consider whether the named beneficiary, all or in part, should be a trust.

Seek Guidance:

For most people, a simple will is all that is needed to ensure that asset transfer and guardianship are carried out in accordance with their wishes. Larger estates, especially those that have illiquid assets such as real estate, may need additional planning tools that are best provided through a qualified estate attorney. An attorney can also be helpful in structuring your estate in a way that causes the least amount of friction between surviving heirs. For larger estates, an estate attorney can also advise on the best arrangement to help your estate avoid death taxes. As estate tax laws do change, it is important to have your estate plan reviewed periodically.


You may be young now, but as you embark upon a lifetime of saving, investing and accumulating assets, the best time to begin arranging your estate is the moment you begin to think about it, even if it's just to draw up a simple will. A simple will can be drawn and executed by going to any one of several online legal sites for under $100. And, while you're thinking about it, be sure and review your life insurance plan. Life insurance provides the liquidity your survivor needs to pay immediate expenses and provide income while your estate is being settled. It is important to ensure that your life insurance protection keeps pace with your estate.

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