When the subject of an estate is introduced to a family, it can potentially become an emotional process. After all, when an estate has to be established, that means the possibility of a family member passing is inevitable. Regardless of whether or not you’re discussing the estate as a family, or if you’re planning for your own estate by yourself or with your trusted peers, it’s important to make sure you get the processes involved correctly in order to ensure the estate won’t have any conflicts in the future. Planning for an estate can be complicated enough, which means you should be aware early on of the kind of things you shouldn’t forget to consider or do while in the process.
An estate is useful as it can help make sure your family’s future or your survivors’ future are secured even without you. If you’re planning the estate on behalf of someone else, then you’re also helping that person make sure everything in terms of finances is settled even when they have passed away. This is one of the many ways one can ensure one’s passing will not leave any problems to those they leave behind. Read on below to know the five things to never forget when planning an estate for a passing.
According to Forbes, estate planning is essential regardless of your estate size, as after all the primary goal is to make sure the right people get the assets and finances you believe are rightfully theirs. As such, planning for your estate in a clear and concise manner can help reduce the amount of worry on your end should something happen to your or if you do pass away. Below are five things to never forget when planning an estate for a passing:
Declare The Receivers Properly
When planning an estate, it’s essential to be clear as to who gets what in terms of your assets and finances. Remember, there are a lot of people that you may want to benefit from your estate, and as such it’s important for you to be clear who is allowed to receive what and in what format.
Make sure you get to prepare a trust or a will, or a set of laws that will help your domicile determine just who inherits your finances and assets. These include non-financial assets as well, such as vintage vehicles, jewelry, or other things.
- Be careful in the declaration of these things, however, as your will may not be able to declare assets where beneficiary designations are still determined by the agreements surrounding them. For instance, life insurance policies and tax deferred retirement accounts in some countries can’t exactly be assigned to people outside their agreements.
- Ask help from an estate lawyer in order to confirm if the assets you’re planning on distributing across your potential survivors are distributed in the right manner, especially in terms of legalities.
Declare How Assets Are Spent
If part of your estate is set to be spent for certain payments, dues, and expenses, make sure they are declared appropriately. This can be done through a trust which can include rules for such a need. For instance, you may want to declare a certain amount of money that will cover special needs and college expenses for particular receivers. If a trustee is assigned with this kind of trust, they are obligated by law to see this through.
Check If You Can Reduce Income And Estate Taxes
If you’re thinking about the possibility of your beneficiaries inheriting income and estate taxes based on what they’re going to inherit from you, lowering such taxes IS still within your capacity. Tax efficient strategies such as leaving taxable assets to certain charities might be able to lower the amount of taxes on your beneficiaries.
- You may also decrease the amount of taxable estate by giving particular amounts to your beneficiaries while you’re still here. These gifts cannot be taxed if they are below $13,000.
Check If You Can Offset Your Taxes Through Insurance
On the subject of taxes, it may be important to remember that you have the possibility of making your beneficiaries lose quite a lot of what they can inherit through income taxes and estate taxes. This can be avoided through life insurance proceeds.
- For instance, if the estate planner you hired has created an estimate that a beneficiary may in fact owe half a million dollars in income and estate tax, you may actually purchase insurance for that same amount for the beneficiary in question. Since proceeds from life insurance that are paid to your beneficiaries are considered devoid of tax, then that amount can be used by your beneficiary to pay the taxes.
Check If You Can Hire A Team
Sometimes, planning an estate can’t be done alone, and a team of professionals can actually help you obtain the best results for your family.
- For instance, a tax professional might be able to help lower the amount of taxes that your beneficiaries will have to pay using more practical strategies.
- A financial advisor is also capable of giving you an investment portfolio that you can use for your assets.
- An estate planning attorney might be able to be of assistance when it comes to creating wills and trusts, and ensuring that your estate plan is created according to what the state requires.
The five things above to never forget when planning an estate for a passing are etched within the estate formation process. As such, this means tiny mistakes or mishaps with these things can pose quite a hassling affair to deal with when discovered late in the process. Knowing these things not to miss as early as now can help avoid these conflicts in the future, especially knowing that these can cost quite a lot of money and time to remedy. If you’re looking into more in-depth information on the legal implications of the subject, do click here to learn more.
Kiren is a estate law writer who enjoys writing about subject in relation to real estate and law. He has written for a few blogs in the past, and enjoys sharing his knowledge with those who enjoy reading. In his spare time he enjoys spending quality time with those he loves.