(Part
1 of a 7 part course)
"If you have not created a will or living trust, or need to update
your will
or living trust but haven't...then you need to read the Estate
Planning Organizer."
- -Dennis Toman
 It
is a common misconception that estate planning is important for
only those with money or who are advanced in age. This myth is a
cruel deception. In most states, if you own property over $30,000
your children or family could be subject to probate. By investing
the time now to plan your estate you could possibly save your loved
ones months if not years of agony and literally thousands of dollars
in court fees and/or estate taxes.
Arranging for the distribution of one's wealth is what estate planning
is all about. A critical part of estate planning is creating documents
that outline your wishes for distributing your assets after you
die. Every individual has an estate plan. If you do not have a formal
written will or trust, your estate plan is created out of default
by your state. Every state in America has laws governing the distribution
of property when a person dies without a will or trust. If you have
not made any provisions for the distribution of your estate before
you die, your estate would be distributed according to your state's
"intestate succession" statutes which provide for the distribution
of your estate to your spouse and relatives in an order established
by your state's law. So the question is not whether you will have
an estate plan, but whether you will have an estate plan of your
own selection or one imposed upon you by law.
Unfortunately, many people have neither a will or a trust which
would identify their intent and desires after their death. They
become so involved in their daily activities that they give little
thought to the consequences of their demise. However, many do realize
the importance of estate planning documents to protect and provide
for their dependents, but people often die prematurely leaving dependents
unprotected. Families can be financially
devastated and ripped apart by this procrastination.
So, as discussed your choices for estate planning are as follows:
- Doing nothing
- Preparing a Will or a Trust
"Download Your FREE
7-Step Estate Planning Mini-Course"
Part 1: How to Choose the Right Plan
Part 2: How to Avoid Probate
Part 3: How to Eliminate Estate Taxes
Part 4: How to Transfer Your Assets into Your Living Trust
Part 5: 2 Common Mistakes You Must Avoid Making in Your Trust
Part 6: How to Simplify Settling Your Estate
Part 7: Top Things You Need to Tell Your Children |
Simply
fill in your name and email below, press Instant Access, and
then in 30 seconds check your email for pyart 1 of our 7-step
email mini-course.
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Traditionally, estate planning has involved creating a will. A will
is a legally binding document that addresses how your assets will
be distributed at your death and also names an executor who will
assist with the administration of your estate. Settlement of your
estate may be supervised by the probate court. This process depending
on the nature of your estate can last as quick as 6 months for a
simple estate or up to 1-2 years for more complex estates.
A will is a flexible tool that can be changed at any time as long
as you are mentally competent. In addition to naming distribution
of the estate, your will can:
- Designate a trust to be established for family members after
assets go through probate. (This type of trust is known as a testamentary
trust not to be confused with a Living Trust.)
- Nominates a guardian.
- Direct how debts, taxes and expenses are to be paid.
Some of the advantages of a will are:
- Disputes can be settled through the probate court.
- A will is traditionally cheaper to prepare than a trust ($200
to $2,000).
- The probate process can lessen the time allowed creditors to
make claims against your estate.
- Probate estates can select a fiscal year rather than a calender
year for income tax purposes.
Some the disadvantages of a will are:
- Lack of privacy: Your files can be accessed through the records
office.
- Time: Probate can take 6 months to 2 years or more until distribution
is administered.
- If you own property in more than one state, then probate needs
to be held in each state.
- Probate and legal fees can range anywhere from 3% to 10% of
your gross estate.
- If you should become incapacitated, a will does not make any
provisions. You need a separate Durable Power of Attorney.
By preparing a will, most people feel they have effectively safeguarded
their family's inheritance. However, this is often a false "peace
of mind". A Last Will and Testament outlines your wishes about the
distribution of your property after death, but testamentary documents
such as wills usually require probate. In preparing only a will,
you may be forcing your loved ones through months, even years, of
agony in the probate court. In some states, probate can take 10%
of your GROSS estate.
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