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 canyon, a chasm which is filed with hazards. These hazards (Probate, Creditors, Con-Artists, Lawsuits, Judgments, Lawyers and death taxes) can do untold damage to the value of your estate and allow your property to go to unintended heirs in unintended ways.
All property owners have done some Estate Planning for the distribution of their estates whether they are aware of it or not. Without a Will of 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 and most efficient ways to get your property over the intestate chasm is to build a bridge to your heirs, otherwise known as a Trust. This provides for the estate to be transferred safely over the financial risks which are posed by Probate, Creditors, Con-Artists, Lawsuits, Judgments, Lawyers and tremendous time delays.
Estate Transfer and Heir Planning:
One of the biggest benefits of pre-death Estate Planning is the ability to name your heirs, specify the share of your estate each of them will receive, and dictate the manner and time at which the heirs get their specific share. Generally speaking this part of Estate Planning may be done with either a will or a Trust. But as mentioned above it takes a Trust to avoid Probate, Protect the Estate from legal problems (Liability Exposure) and special issues with minor children heirs.
Some of the heir planning issues to consider are as follows:
- Whether the heirs are to receive equal or unequal shares. There are several factors that can cause the estate owners to vary the share sizes they leave to each heir. (Will, Trust of Beneficiary Arrangements)
- At what age should the heirs get their share, or should their share be paid in two or three installments at different age milestones, paid out for life, etc. (Trust)
- Whether or not to leave specific property to certain heirs, such as the family home to one child and certain other property to another child. (Will, Trust, Beneficiary Arrangements of Joint Tenancy)
- Whether or not to clearly OMIT or Dis-inherit any hairs. (Will or Trust)
- How to deal with situation where a married couple each have different children from former marriages, but they want to create one comprehensive Estate Plan. This may require dealing with issues such as one spouse having more children or one spouse having a larger estate. (Trust)
- Dealing with issues where estate owners get married after they have built their own separate estate, which they may want their new spouse to benefit from but then they want the remainder of the estate to go to their heirs and not to their spouse’s heirs. (Trust)
- What to do in the case where a child has reckless spending habits or substance abuse problems, and the parents fear that child will quickly misuse the inheritance. (Trust)
- How to deal with mentally or physically disabled heirs. (Trust)
- Assuring that the heirs will use their share to pay for a college or other type of education, and do so in a prudent manner. (Trust)
- What happens if an heir predeceases the estate owner. (Will, Trust, Beneficiary Arrangements, Joint Tenancy)
- How to deal with specific gifts to special heirs, such as grandchildren, nieces, and nephews, charities, etc. (Will, Trust, Beneficiary Arrangements, Joint Tenancy
Most people believe that Estate Planning is just planning for the passing of property to one’s heirs at death. NOT SO! The way you own your property NOW determines how vulnerable it is to your and your family’s personal and business liabilities during your lifetime as well as after. WARNING!! This topic alone is reason to talk with us immediately.