Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence. A comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies.
Your "estate" consists of all property owned by you at the time of your death, including:
- Real estate
- Bank accounts
- Stocks and other securities,
- Life insurance policies,
- Personal property such as automobiles, jewelry, and artwork.
Regardless of your age, or the size and complexity of your estate, an estate plan can accomplish the following:
- Identify the family members and other loved ones that you wish to receive your property after your death.
- Name guardians for minor or special needs children
- Designate trustees for the management of financial assets
- Ensure that your property will be transferred to those you have identified, as quickly and with as few legal hurdles as possible.
- Minimize the amount of taxes that will need to be paid in order for your property to pass to others after your death.
- Avoid the time and costs associated with the probate process by utilizing estate planning devices like living trusts and "payable on death" bank accounts.
- Dictate the kinds of life-prolonging medical care you wish to receive should you be unable to make your wishes known when the time comes.
- Set forth the kind of funeral arrangements you would like, and how related expenses are to be paid.
- Create charitable trusts to establish a legacy for your life’s work
Careful estate planning means not merely creating a will, but also designing a comprehensive and flexible plan to protect future generations from the significant gift and estate taxes that often accompany the transfer of wealth. Depending upon your specific needs, this plan may involve the organization of assets and their form of ownership, the involvement of appropriate fiduciaries, or the development of broad-ranging strategies intended to minimize taxes and maximize benefits for family members.
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Source: Internal Revenue Service, www.irs.gov