If you understand that you should have an estate plan but do not know the first thing about them, then you need to learn about the basics of estate planning.
It might seem simple, but the first step to starting your estate plan is to learn about basic estate planning. You need to know what the basic documents are and what they do before you can decide what your estate plan should look like. For example, if you are not certain what a will is, then you cannot know what to put in one even if you have heard you should have one.
It is okay not to know what a will is. No one is born with that knowledge. There was a time when even expert estate planning attorneys did not know the basics.
Recently, Yahoo Finance discussed some estate planning basics in "Understanding the basics of estate planning."
Items mentioned include:
- A will is a legal document that essentially distributes your property to the people you want to have it and designates someone to be in charge of that distribution.
- A trust is a legal entity that holds property for the benefit of designated individuals and it is overseen by someone (a "trustee") who is charged with making sure the designated individuals, the beneficiaries, receive the property to which they are entitled.
- If any estate taxes are due, they are paid by the deceased's estate before any property is distributed to heirs.
- Currently, very few estates have to pay federal estate taxes. Only estates with assets greater than $5.45 million have to pay.
- Giving money to others can be part of an estate plan. There are rules about how much you can give to any one person in any single year.
- Some states have their own estate taxes, so ask your attorney if your state is one of them.
Reference: Yahoo Finance (July 1, 2016) "Understanding the basics of estate planning."
