A common assumption holds that estate planning is only for the wealthy or the elderly, yet there are legitimate reasons for most adults to consider putting a plan in place. Whatever the size of an estate, planning ahead will ease the work required from family members. Moreover, anyone with minor children can set up plans for their care by designating guardians and arranging financial means.
Elements of an Estate
Creating a will protects families and affirms final wishes. Without a will, the state of residence will make many decisions, leaving family members without a voice.
Setting up a living trust in addition to a will can minimize or eliminate the need for probate. Probate can be a lengthy and costly process, yet it is often required when no more than a will exists. Family members may need assets for support. Delays in distribution can create hardship, while court costs and attorney fees can rapidly deplete the available amount.
Designating a power of attorney and setting down medical directives can ensure affairs will be overseen and final wishes met should an individual become incapacitated or terminally ill. Once something happens, it may be too late to make these choices.
Taxes are an unavoidable feature of an estate. Amounts below designated levels won’t be subject to federal taxation, but for larger estates, planning and timely distributions can lessen taxed amounts; state inheritance laws must also be taken into account. Final tax returns for the estate and the deceased’s income are necessary for everyone, regardless of the estate’s size.
Instruments for Planning
Standard Will: The main purpose is to name a guardian for minor children, select an executor to carry out final tasks and to designate the distribution of assets. It’s standard protection.
Medical Directives: A health care proxy, a medical power of attorney and a living will cover eventualities from serious to terminal. These documents designate the level of care that’s desired, as well as for someone to make medical decisions and when to cease care.
Living Trust: Assets owned by a living trust can be distributed to beneficiaries without the need for probate. A living trust can benefit estates of any size, easing the ability to carry out final wishes. Similarly, life insurance, pension plans and retirement accounts pass directly to beneficiaries without requiring court intervention.
Other types of trusts and financial instruments can be set up under the living-trust umbrella to provide for heirs. Many options exist, including limited distribution of assets prior to death to reduce tax burdens. Estate planning in advance of need lessens the burden on loved ones and ensures final wishes are met.
For more information regarding Estate Planning contact New York Construction Accident Attorney
The information provided here is not intended as legal advice and should not be taken as such.
Article Source: http://sarasotaattorney.org/an-overview-of-estate-planning/

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