Approximately half of Americans who have children do not have a properly prepared will in place. While many parents are young and may not be thinking about having to leave assets to their children, even older individuals have not prepared a will either. As many as 41 percent of individuals between the age of 55 to 64 have not yet had this document prepared.
The importance of a will is that it tells everyone how you want your assets distributed after you pass away. However, it’s important to have the will executed properly so that battles do not ensue concerning your property. Will contests are common. These arise when there are unclear provisions in the will or when the will was not prepared according to the laws of the state in which you reside.
Estate planning and probate involve many different considerations. Therefore, there are other documents besides will what may wish to consider having prepared. These include powers of attorney and living trusts prepared for when you are unable to make your own determinations on medical care or finances.
It’s important to keep in mind that legislation regarding estate taxes periodically change. When laws take effect favorable to one’s situation, it’s a good idea to take advantage of the legislation while these laws are still in the books. In some instances, using certain strategies minimizes the taxes paid if paying taxes is unavoidable.
Knowing the tax consequences of gifting certain assets allows you to distribute the gifts in a less costly manner. Spreading the gifts out in a well-planned fashion may save upon the amount of taxes overall.
Finally, trusts are a useful tool for controlling how assets are distributed or used. Assets within the trust help in avoiding putting these assets going through probate.
Personal considerations are always in play. Experienced wills and trusts attorneys know how to assist clients in using these tools in the best manner.
Source: Value Walk, “Four Tips For Creating Your Financial Legacy Now,” Reid Abedeen, March 30, 2015