13 Basics of Estate Planning
Estate planning and taxes go hand in hand, which is why Milton Law Group is an ideal estate planning partner, because a core objective of many estate plans is to minimize taxes so you can pass on more of your wealth to your family.
Having proper estate planning in place is something every adult should do. Estate planning can help you accomplish any number of goals, including appointing guardians for minor children, outlining healthcare directives should you become ill, and stating how and to whom you would like to pass your estate on to when you pass away.
While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to dive into. To help you get situated, below are 13 important terms and basics of estate planning you should know as you think about your own estate plan.
Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.
A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.
All assets and debts left by an individual at death.
A person with a legal obligation (duty) to act primarily for another person’s benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith.
The process of transferring (re-titling) assets to a living trust. A living trust will only avoid probate at the trustmaker’s death if it is fully funded, meaning it contains all the decedent’s assets.
Unable to manage one’s own affairs, either temporarily or permanently; often involves a lack of mental capacity.
The assets received from someone who has died.
The court-supervised process of managing the assets of an incapacitated person. Conservatorship is another term used for this process.
A deduction on the federal estate tax return, it lets the first spouse to die leave an unlimited amount of assets to the surviving spouse free of estate taxes. However, if no other tax planning is used and the surviving spouse’s estate is more than the amount of the federal estate tax exemption in effect at the time of the surviving spouse’s death, estate taxes will be due at that time.
Settle an estate
The process of winding down the final affairs (valuation of assets, payment of debts and taxes, distribution of assets to beneficiaries) after someone dies.
A fiduciary relationship in which one party, known as the trustmaker or settlor, gives another party, known as the trustee, the right to hold property or assets for the benefit of another party, the beneficiary. The trust should be memorialized by a written trust agreement, outlining how the trust assets will be distributed to the beneficiary.
A written document with instructions for disposing of assets after death. A will can only be enforced through a probate court. A will can also contain the nomination of guardian for minor children.
Milton Law Group Estate Planning Attorneys
Milton Law Group estate planning attorneys provide sound legal advice and insight to help protect our clients’ assets during their lifetime and for their family’s future. We advise clients on all aspects of estate planning, administration, and settlement. Please contact us today to start safeguarding your future.
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