People's Guide To Estate Planning


Estate planning refers to planning and arranging the disposal of an estate upon the owner’s death. The advantage of estate planning is the ability to eliminate issues that may occur with probate and maximize the estate value by reducing expenses and taxes. There are many aspects of estate planning which may include powers of appointment, wills, beneficiary designations, property ownership and trusts. Many accountants or attorneys specialize in estate planning.

Charitable Planning

Many estates will leave part of the estate, property or value to a charitable foundation. These charitable gifts include public charities, foundations and trusts. Proper planning is necessary to ensure that the gifts are used as intended. Additionally it is important that both the estate and charity are in the best tax position as charities do not pay taxes on philanthropic gifts. Therefore the timing, form and method of the charitable gift are very important as different procedures are required. With charitable planning the funds that are provided for charity are set up and then when death occurs the value, property or money is given over to the charity. This may be in the form of a trust or as an outright gift.

4 Goals of Charitable Planning

Charitable Planning with Business Interests (PDF)

Successful Charitable Planning

Estate Administration

Administration of an estate is a large responsibility for the trustees, administrators or executors of the estate. The administrator is the person that looks over the property when the owner dies. This person acts as the deceased representative. Administrators that were designated in the will are called executors, if there is no will then the individual is called an administrator. The court grants the executor the authority to deal with the estate during probate. The executor or administrator must make an application to the High court for the necessary grant. The duties of the administrator include arranging the funeral if this has not already been done, obtaining the grant of probate, obtaining details of the liabilities and assets of the estate, paying taxes or debts, keeping the necessary records and distributing the assets of the estate as laid out in the will.

Estate Administration (PDF)

Administrator of a Probate Estate

What are Executor Responsibilities?

Estate Litigations

This form of litigation occurs when an individual believes there is an injustice that occurs when the estate is dispersed. There are many forms and litigation available for those that believe they have been denied what they are legally entitled. This can be very emotional for those that claim an injustice and those that respond to the claim. Estate planning tired to minimize the chance for litigations but problems may still arise.

Estate Planning to Avoid Estate Litigation

Common Grounds for Estate Litigation

Probated Litigation and Contested Estates

Estate Settlement

There are several steps involved with estate settlement as first the trust or will documents must be located, all the assets are inventoried and the executor will carry out all bequests. Bills will be paid, assets converted to cash and then distributed as stated in the will, trust or according to the law. This also includes dealing with any necessary taxes including filing a tax return for the estate.

Steps in Estate Settlement (PDF)

Estate Settlement Basics (PDF)

How to Settle an Estate (PDF)

Guardianships

A guardian is a person that has been appointed by the court to make decisions for the ward. In estate planning this normally refers to children or individuals that have inherited the estate but may not be able to make decisions for them. Normally the ward is too young, has an impairment or is found to be incompetent. A guardian can be given authority to guard the person or to manage the wards property or money, known as guardian of the estate. More than one individual may be named as a guardian depending on the ward’s needs.

Understanding Guardianships (PDF)

Guardianships and Its Alternatives

Guardianships and Conservatorships

Health Care Proxy

Health care proxy is a document that allows an individual to appoint another person to make health care decisions should the individual be incapable of making these decisions. The health care proxy does not make decisions until the individual is unable to, no matter how long the proxy has been drawn up. This proxy will contain information that the proxy must follow. Some states will have limitations to who can act as a proxy. The types of forms for health care proxy vary in each state.

Health Care Proxy

The Health Care Proxy Law

Living Wills and Health Care Proxies

Long Term Care-Insurance

Long term care insurance or LTC is sold in Canada, the United States and the United Kingdom. It helps with the cost needed for long term care beyond the predetermined time period. This insurance will cover care that is not covered by Medicaid, Medicare or other health insurance. This type of care is typically for helping perform basic daily activities and is not dependent on age.

Long Term Care Insurance

Hidden Truths about Long Term Care Insurance

Best Options for Long Term Care

Living Wills

The living will is the oldest form of estate planning. It is a will that is drawn up when the individual is still living, hence the name. This document typically contains information about the individual’s health wishes and how the estate will be distributed upon death. Many times living wills will need to be updated as they typically reflect the individual’s wishes at a specific moment in time.

What is a Living Will?

Living Wills (PDF)

Living Will: Guide to Health Care Decision Making

Medicaid Planning

Many individuals will need to rely on Medicaid for health care as they age. There are inequalities to the system in which the state may take money or value away from the healthy spouse. Medicaid planning helps to protect the assets of the spouse. Planning helps to ensure that families get the help they need through Medicaid without abusing the system or losing the rest of their assets.

Medicaid Planning

Planning for Medicaid

Medicaid Planning Strategies (PDF)

Power of Attorney

The power of attorney is a letter or document that authorizes an individual to act on another’s behalf. This refers to business, legal matters and private affairs. The person that receives the power of attorney is known as the done, attorney or agent. This document may be in writing or is an oral agreement, both which will hold up in court. There are several types of powers of attorney including a durable power of attorney, health care power of attorney and springing power of attorney.

Power of Attorney Form (PDF)

Types of Power of Attorney

Duties as Power of Attorney (PDF)

Probate

Probate is a process in which the all estate claims and distributions are made as dictated by the will. The court will determine the validity of the will and all specifications. The will must be proved valid before any other activity relating to the will and estate can start. This includes notifying creditors, distributing assets, following the proper time factors and dealing with any lawsuits or litigation. Probate is not completed until all aspects of the will are resolved.

Overview of the Probate Process

Simplifying the Probate Process (PDF)

What is Probate?

Special Needs Planning

This type of planning in the estate is specifically for those children or family members that are considered special needs. If an estate leaves to many assets to a special needs individual than that individual will lose disability and other benefits that they need from the government. Special needs planning will ensure that the special needs individual will be eligible for all the benefits that they need by careful estate planning.

Estate Planning for Families with Special Needs

Planning the Future for Children with Special Needs

Special Needs Planning

Trust

A trust is an agreement or relationship in which the property of one is held by another party. The party that holds the property is doing this for a third party which is beneficial to the third party. The trustee holds the property until the third party can take control. The trust specifications and rules are set out in estate planning, including the beneficiaries and the trustees.

What Kinds of Trusts are there?

Trusts Explained

Types of Trusts

Veteran’s Benefits

Those individuals that served in the US military are eligible for veteran’s benefits. These benefits include disability compensation, pensions, survivor’s benefits and burial benefits. In estate planning it is important to ensure that planning is done properly to avoid problems with veteran’s benefits and those benefit’s that are available to family members of the veteran.

Veterans Benefits

The Intersection of Estate Planning and Veterans Benefits (PDF)

Estate Planning and VA Survivor Benefits (PDF)

Wills

A will is a document that sets out your wishes for your estate and loved ones. It is possible to specify funeral plans, the trustee, executor, guardians for children, gifts and provisions. This is a very valuable legal document that can ensure that loved ones are properly taken care of. There are many laws that can affect the estate and will and these need to be followed to ensure that the deceased wishes are properly taken care of.

What is a Will?

Why Making a Will is So Important

Estate Planning: The Importance of Your Will