Estate planning is an important part of ensuring that the distribution of our assets follows our wishes. Most people avoid the topic of estate planning because it coincides with death. Now, we understand that because of that, it is an uncomfortable topic. But we never know when we may pass, and estate planning can help ensure our wishes are met and minimize the stress on your family. Although most people know what estate planning is, they have many questions about it. Below, we will explore some of the common questions people have and their respective answers.
What happens if I die without a will?
When you pass without a legal will, you will have died “intestate”. Your state’s laws of descent and distribution will be used to determine who gets what from your estate. Each state has its own laws regarding this, but generally, spouses and children are the first in line to receive the assets from your estate.
What is a trust?
A trust is a fiduciary agreement that allows a third-party, known as the trustee, to hold assets on behalf of the beneficiaries. The trustee is the legal owner of the property and the beneficiaries are the equitable owners of the trust.
Why do I need to plan my estate?
By planning your estate, you can ensure that your assets are distributed the way you want them to be. You can control exactly who can get what. Additionally, it can help you minimize estate transfer taxes.
What is power of attorney?
Power of attorney is a written authorization to represent someone on their behalf in business affairs, private matters, healthcare, or other legal matters. You can stipulate exactly when and how they can make decisions on your behalf.
Can I leave money to charity?
Yes, when you are planning your estate, you can allocate money to be donated to charity.
Will my beneficiaries’ inheritance be taxed?
It will depend on the state in which you live. As of 2013, the federal estate transfer tax was eliminated. Currently, only six states charge an estate transfer tax.