If you are considering an estate plan but don't know where to begin the first step is looking at the basics.
While an estate plan can get complex depending on the circumstances it might be best to take a look at the basics as Yahoo Finance recently discussed 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 receive it and designates someone to be in charge of that distribution. In California, administering a will requires probate.
- 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. A trust should avoid probate.
- 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.
An estate planning attorney can guide you through the basics and on to the special considerations you might need for your circumstances.
Reference: Yahoo Finance (July 1, 2016) "Understanding the basics of estate planning."