ESTATE PLANNING BASICS
Why do Estate Planning?
Dying Intestate:
We need to do estate planning to avoid dying "intestate". Dying intestate means dying without having created either a will or a trust which provides instructions for passing your estate on to your heirs. Dying intestate is like taking your property and attempting to throw it to your heirs on the other side of a deep chasm, a chasm which is filled with hazards. These hazards (probate, creditors, con-artists, lawsuits, judgments, lawyers, and death taxes) can damage much of the value of your estate and allow your property to go to unintended heirs and in unintended ways.
All property owners have done some estate planning for the distribution of their estate to their heirs whether they are aware of it or not. Without a will or a trust the inheritance laws (laws of intestacy) of your state will determine how your property will pass to your heirs. If you have no heirs that fit the state's formula, the assets will be taken by the state. Often times the state's formula and rules for moving assets to your heirs will not be what you would have chosen if you had done some planning.
One of the best ways to get your estate over the intestate chasm is to build a bridge to your heirs, otherwise known as a trust. This provides for the estate to be taken safely over the financial risks which are posed by probate, creditors, con-artists, lawsuits, judgments, lawyers, and death taxes. Let's evaluate some of these financial risks to better understand how and why to avoid them.
INTRODUCTION
WHY DO ESTATE PLANNING?
PROBLEMS
TAXES
ESTATE TRANSFER & HEIR PLANNING
TRUSTS vs. WILLS, WHICH IS BEST FOR YOU?