Frequently Asked Questions - Wills/Estates
The following Q & A should help you understand some basic principals about estate planning and how it can benefit you. The answers provided below are not meant to be exhaustive, but rather to provide you some basic estate planning knowledge.
What is Estate Planning?
Estate Planning allows an individual to organize and provide for the disposition of his or her property at death according to the client's desires while minimizing the cost of the administration of one’ estate including potential taxes.
Do You Need Estate Planning?
Estate planning benefits a client not only in the orderly passing of his or her property at death but also can serve to make sure that a client's assets and personal affairs will be managed according to the client's desires while the client is alive and also provide for the care and financial management of one’s children. In other words, the need for estate planning is more than a function of one’s wealth.
How Can Estate Planning and a Will Help You?
Estate Planning can help you in the following ways:
1. Proper planning will make sure your property goes to the people whom you want to have it when you die and not some unexpected beneficiary.
2. Proper planning can allow you to avoid the expense and delays associated with probate.
3. Proper planning can help minimize or eliminate taxes that the government imposes on wealth transfers, "estate taxes" or “death taxes”.
4. Proper planning can help reduce or eliminate capital gains taxes on property transferred at death.
5 . Proper planning can make sure that if while you are alive you are no longer capable of managing your estate, someone can pick up the pieces for you.
6. Proper planning can provide some asset protection.
7. Proper planning can avoid conflicts in the event it is necessary to appoint someone as guardian of your minor children.
8. Proper planning can avoid conflicts in the event it is necessary to appoint a conservator to manage your affairs.
What is a Living Will and Durable Power of Attorney for Healthcare?
A Living Will directs that life-saving procedures are to be withheld or withdrawn when that person is suffering from a terminal condition. A Durable Power of Attorney for Healthcare allows an appointment of an agent (often a spouse or child) to make health care decisions if the principal is unable (by reason of incompetence) to make those decisions himself.
What is Probate?
Probate is the process by which a will is established as the valid Last Will and Testament of a decedent and the estate is administered. The first step in the administration of an estate is the appointment of the fiduciary or executor or administrator is a will is not present. The fiduciary may perform functions such as collecting or inventorying the estate assets, paying debts and taxes, and distributing the balance in accordance with the Will or laws of intestacy.
Are All Estates Subject to Probate?
Lastly, property isn't subject to probate if by operation of law it passes to a beneficiary at someone's death. For example, joint tenancy accounts or jointly held property with rights of survivorship pass to the survivor without probate. Life insurance proceeds pass to the beneficiary without probate. Retirement benefits can pass to a beneficiary without probate.