Estate Planning

Overview

Estate planning arranges for the transfer of an individual's estate at the time of death. An estate consists of all property owned at death before it is distributed by will, trust, or intestacy laws. An estate may contain both real property (real estate, including houses and investment properties) and personal property (all other property, including bank accounts, securities, jewelry and automobiles). Typically, the process of estate planning involves extensive consultation with a number of professional advisors, including lawyers, financial counselors, accountants and life insurance representatives.

Purpose of Estate Planning

Estate planning benefits those with large estates, as well as those with modest assets. Creating an estate plan ensures that all property will be distributed according to the personal wishes of the deceased, and that those who are benefiting from the estate receive the largest distribution possible with a minimum amount of delay. Specifically, estate planning allows an individual to decide exactly who will benefit from their estate, and to what extent. Estate planning also ensures that the estate will not be destroyed by taxes imposed on the transfer of assets at death. In addition to providing financial security, estate planning encourages individuals to make important decisions, such as appointing a guardian for minor children, choosing healthcare preferences, and securing funeral arrangements.

Estate Planning Tools

An estate plan is created to reach the specific goals of the estate owner. A number of tools may be utilized to ensure the best possible distribution of assets. The basic instruments used in estate planning are listed below. However, individual estate plans depend on the size of the estate, the number of beneficiaries, and the purpose of distributions.

The Will. The most common estate planning instrument is the will. A will sets forth who will inherit what property. Additionally, wills often appoint a guardian for minor children or specify what funeral arrangements should be made at the time of death. All wills must pass through probate, which may be a lengthy and expensive process. As a result, the will's beneficiaries may not receive the entire share specified in the will, and there may be a considerable delay in the distribution of assets. In the absence of a will or other testamentary instrument, the state will distribute an individual's estate according to the laws of intestacy. Generally, under the intestacy system, assets are divided in a particular order, to provide for a surviving spouse, issue, parents or siblings.
The Trust. A trust is an arrangement by which a trustee distributes payments or property to a beneficiary according to the terms of the trust. A beneficiary may be a family member, a friend, a charity or a pet. A trust may be created during the individual's life, or it may be created by will. A trust created by will transfers property to the trustee at the time of the individual's death. By creating a trust, the beneficiaries to the estate bypass the probate process.
Health Care Directives. Health care directives ensure that an individual's medical wishes will be carried out when they become unable to make their own health care decisions. Health care directives include a health care declaration and a power of attorney for health care. Health care directives, also known as "living wills," set forth an individual's personal decisions regarding healthcare at the end of their lives. A power of attorney for health care gives a family member or friend control of all health care decisions leading up to the person's death.
Financial Power of Attorney. Finally, a financial power of attorney appoints a third party to handle an individual's finances when they can no longer take care of their own financial affairs. A financial power of attorney may designate a friend, family member, or a trusted professional to fulfill this position.

LegislationFeed

Bill Introduced: S. 3470: Support for Iraq Oil Trust Act of 2008 September 10, 2008 A bill to require United States Government representatives to present to the Government of Iraq a plan to establish an oil trust.
Bill Vetoed: H.R. 6331: Medicare Improvements for Patients and Providers Act of 2008 July 14, 2008 To amend titles XVIII and XIX of the Social Security Act to extend expiring provisions under the Medicare Program, to improve beneficiary access to preventive and mental health services, to enhance low-income benefit programs, and to maintain access
Bill Introduced: H.R. 6289: Save Family-Owned Farms and Small Businesses Act of 2008 June 17, 2008 To amend the Internal Revenue Code of 1986 to increase the maximum reduction in estate tax value for farmland and other special use property, to restore and increase the estate tax deduction for family-owned business interests, and for other
Bill Introduced: S. 2856: Optional One Page Flat Tax Act April 14, 2008 A bill to amend the Internal Revenue Code of 1986 to provide taxpayers a flat tax alternative to the current income tax system.
Bill Signed by President: H.R. 3508: 2005 District of Columbia Omnibus Authorization Act October 15, 2006 To authorize improvements in the operation of the government of the District of Columbia, and for other purposes.October 16, 2006: Signed by President.

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ArticlesFeed

Crummey Delivers Another Knockout Punch to the IRS December 12, 2015 Tax Notes, November 2015 Florida A&M University College of Law Accepted Paper Series 65 downloads
Comments on Proposed Treasury Regulations Defining Terms Relating to Marital Status December 12, 2015 University of Pittsburgh - School of Law Working Paper Series 6 downloads
Airbrushed Heirs: The Problem of Children Omitted from Wills December 11, 2015 Real Property, Probate and Trust Law Journal, Vol. 50, Fall 2015 University of San Diego Accepted Paper Series 4 downloads
Das Verwandtenerbrecht in historisch-vergleichender Perspektive (The Intestate Succession Rights of the Deceased's Relatives in Historical and Comparative Perspective) December 10, 2015 Rabel Journal of Comparative and International Private Law (RabelsZ), Vol. 79, No. 4, pp. 768-821, October 2015, DOI: 10.1628/003372515X14373846830061, Max Planck Private Law Research Paper No. 15/28 Max Planck Institute for Comparative and
The Idea of Status in Fiduciary Law December 8, 2015 Forthcoming in: Paul B. Miller & Andrew S. Gold, eds., Contract, Status, and Fiduciary Law (Oxford: Oxford University Press, 2016) McGill University Faculty of Law Accepted Paper Series 50 downloads

Angie's List: Estate Planning - MyWabashValley December 15, 2015 MyWabashValleyAngie's List: Estate PlanningMyWabashValleyA recent AARP survey finds that roughly 40 percent of Baby Boomers have yet to draw up a will. That number grows to 71 percent for all Americans over the age of 34. We site procrastination,
Why You Need Key Estate-Planning Documents - NerdWallet (blog) December 15, 2015 Why You Need Key Estate-Planning DocumentsNerdWallet (blog)Do I need a will? How do I get one? Financial planners like myself are often asked these questions. My answer is that it depends. (I'm not a lawyer, after all.) But generally speaking,
5 Ways Couples Can Tackle Estate Planning Now - NerdWallet (blog) December 14, 2015 5 Ways Couples Can Tackle Estate Planning NowNerdWallet (blog)No one wants to think about the possibility of a spouse passing away. But neglecting to prepare for that possibility makes life all the more difficult if it happens. A NerdWallet survey of
Now There Are Tax Transcripts In Lieu of Estate Tax Closing Letters - The National Law Review December 14, 2015 JD Supra (press release)Now There Are Tax Transcripts In Lieu of Estate Tax Closing LettersThe National Law ReviewThe Internal Revenue Service ("IRS") announced earlier this year that it would no longer routinely send out an estate tax closing letter
The Holidays can facilitate an opportunity for estate planning conversations - KING5.com December 14, 2015 KING5.comThe Holidays can facilitate an opportunity for estate planning conversationsKING5.comWhether geographic differences or timing and availability may make it difficult at times to get the entire family together, the holidays could be a perfect

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In New York, Leases Are Estate Assets Sometime Capable Of Being Inherited December 15, 2015 In New York, leases are capable of being passed through an estate the same as a piece of property. This is due to a mishmash of laws ranging from the state which grants estate asset status to lease to the...
Cinderella's Trust Fund has arrived December 15, 2015 Today I received a box full of copies of my newest book, "Cinderella's Trust Fund". I just love opening the box and seeing the shiny, new books for the first time! We've put a handful of them on the shelf at the office for those of
Will Assets in My Living Trust Be Counted By Medicaid? December 15, 2015 The Medicaid program will pay for long-term care. You may hear this statement and shrug your shoulders, because you will never qualify for Medicaid, and you will qualify for Medicare by the time you require living assistance. This reaction makes
Wills, Trusts, and Estates Blog Named to ABA Blawg Hall of Fame December 15, 2015 I was recently notified that the American Bar Association inducted this blog into the ABA Blawg 100 Hall of Fame. This posting is designed to express my most sincere appreciation for the support of my readers, contributors, and blog assistants...

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