What Is Estate Planning?
Estate planning is basically the procedure of arranging and planning, during an individual’s lifetime, for the proper management and allocation of the individual’s estate following the individual’s death, if the individual becomes incapacitated. The term, ‘estate’ refers to any assets which may be left to the individual’s family following his or her death. Assets that may be left for the use of his or her family are commonly referred to as ‘estate’ and are commonly defined as those properties owned by an individual, or jointly held between two people who were legally married to each other at the time of the death of the individual.
Generally, the state law will dictate the assets that may be left to the deceased’s immediate family, which may include spouse, children, and parents. Other assets that may be left to the estate may include property such as real estate and personal properties such as vehicles, jewelry, bank accounts, retirement accounts, insurance policies, and any other financial securities, certificates, and stocks owned by the deceased. This last category refers to property that was not jointly held, like stocks, bonds, mutual funds, and other investment instruments.
In some states, a person must specifically petition the court to have a judge declare that specific assets should go to a particular family or trust. This can often be done when an individual has not had a lawyer with them on their death or upon death, and the courts feel that the individual’s wishes may have been rendered ineffective because of an attorney not being present. Estate planning lawyers are an invaluable resource for all individuals and their families.
When a person passes away, he or she may leave behind property in the form of property that may be inherited by his or her children. If there is not enough to pay for all of the children, or if the property is small, the heirs may divide it among themselves. In most cases, it is advisable to leave all inheritance claims to the children, and not the parents, so that they may share in the benefits, instead of leaving it to a new generation.
After the passing of a person, it is also important to protect his or her assets in the event that he or she leaves behind debts that cannot be repaid. Debts are generally defined as financial obligations of the individual that cannot be repaid. If these debts are not paid off, the remaining funds are usually put in a trust, where they may be used to pay off the debts and any outstanding taxes. or debts that have accumulated.
If the debts can’t be repaid, then the estate is passed onto the trust. This trust then sells assets or pays off the debts to pay off the creditors. This may be done through the sale of a home, vehicles, real estate, or any other assets held jointly with the deceased.
A person also has the right to distribute properties after his or her death to any surviving spouse, children, and parents of the deceased, however, this isn’t mandatory. Some states require that a trust must be established ahead of time for the distribution of assets to any family members. Also, it is vital that any surviving spouse of the deceased must sign a power of attorney granting the deceased full and final authority over the administration of the assets.
With regards to asset allocation, it is important that the estate planning attorney is aware of all of the rights the deceased has in his or her property. These rights include the rights of redemption, the right to take possession of the estate, the rights to possess the assets of the deceased without the consent of the decedent’s survivors, the right to change the name of the deceased, and the ability to change the ownership and title of the assets.