In simple terms ‘estate planning’ is the process for both planning for the possibility of mental disability prior to death and planning for death.
Planning for mental disability should be a key part of every estate plan, but this is often overlooked. There are 2 key aspects to this type of planning:
• who will take care of your personal well being
• who will take care of your finances.
If you do not have a Last Will and Testament before you die, then your estate will be divided up based on the intestacy laws of the state where you live at the time of your death and the intestacy laws of any other state where you own property/or tangible personal property.
Questions to be considered are:
• What will happen to your property if you don’t make an estate plan before you die?
• What does it mean to have died intestate?
• How does a Revocable Living Trust fit into an estate plan?
Estate planning should be managed in the same way that you would deal with any other important decision in your life. You should learn/take advice as to the steps you need to follow to establish and maintain a practical and common sense plan.
Estate Planning is the process of arranging for the disposal of an estate in the most tax friendly manner while causing no uncertainties for those left behind. It attempts to eliminate uncertainties over the administration of probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children.
A trust is a legal contract where one person, the trustee, holds and manages property for his benefit or the benefit of someone else, the beneficiary. Any type of personal or real property can be included in a trust, such as real estate, personal possessions, stocks and cash.
No matter what name is given to a trust, all trusts have the same components:
• The grantor, sometimes referred to as the donor, is the person who actually creates the trust.
• The trustee is the person or organization, such as a bank, that holds the contents of the trust and manages it.
• The principal of the trust, sometimes referred to as the trust fund, is the money and property that is held within the trust.
• beneficiary or beneficiaries. These are the people who will derive benefits from the trust.
Rarely does the principal in the fund remain constant since it might earn interest and dividends; property could increase in value; or cash could be spent by the trustee, according to the trust instructions.