March 14, 2018 | Fundamentals
What is an estate plan?
At its most basic, an estate plan is a written direction regarding how your property passes at your death. Because it is in society’s best interest for this transfer to happen in an orderly fashion, every American has a default estate plan. This default estate plan is provided courtesy of the legislature in each state, which passes laws providing for descent and distribution. Dying without a Last Will and Testament is known as dying “intestate” and will trigger the laws of descent and distribution. For example, the laws in Georgia set out that an Administrator must be approved by a county Probate Court and that the Administrator must divide your assets and distribute them according to whom among your relatives is closest in kinship to you. In this scheme, as you might expect, a spouse and children take precedence over more distant relations. This default estate plan is adequate for only the smallest estates.
Generally, dying intestate is not advisable as the simplicity of the descent and distribution laws do not take into account planning for taxes, creditor protection, trusts for minor children, special assets like retirement accounts, and a host of other complications. A written estate plan is the far superior approach. The core of such an estate plan is a valid Last Will and Testament. In contrast to dying intestate, if you die with a Will in place you are said to die “testate.” A Will can be as simple as a short Will that leaves all assets outright to your spouse. Wills can also include many complex provisions providing for specific bequests of your property, charitable bequests, appointing trustees, creating different kinds of trusts, planning for tax payments, creating foundations or charitable trusts, and so on. Although it may seem daunting, an experienced and knowledgeable attorney can assess your needs and prepare an appropriate Will for you.
Depending on your needs, an estate plan may also include more sophisticated planning beyond just your Will. These planning options can include the use of a revocable or “living” trust, charitable planning during life, and strategic estate tax planning techniques to implement during life.
Please contact us today if you would like to discuss your current estate plan or would like to create a new estate plan for you and your family.