Estate planning is an incredibly important tool, not just for the wealthy or those thinking about retirement. On the contrary, estate planning is something every adult should do.
We can help your practice get up to date and prepared to minimize breach risks from third-party vendors. Subscribe to stay current and up to date on important matters that will impact your practice. (To subscribe to our blog click here).
Estate planning can help you accomplish any number of goals, including appointing guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can pass more wealth onto your family members, and stating how and to whom you would like to pass your estate on to when you pass away.
While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to dive into. To help you get situated, below are some important terms you should know as you think about your own estate plan.
- Assets – Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
- Beneficiary – A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.
- Distribution – A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.
- Estate – All assets and debts left by an individual at death.
- Funding – The process of transferring (re-titling) assets to a living trust. A living trust will only avoid probate at the trustmaker’s death if it is fully funded, meaning it contains all of the decedent’s assets.
- Marital deduction – A deduction on the federal estate tax return, it lets the first spouse to die leave an unlimited amount of assets to the surviving spouse free of estate taxes. However, if no other tax planning is used and the surviving spouse’s estate is more than the amount of the federal estate tax exemption in effect at the time of the surviving spouse’s death, estate taxes will be due at that time.
- Trust – A fiduciary relationship in which one party, known as the trustmaker or grantor, gives another party, known as the trustee, the right to hold property or assets for the benefit of another party, the beneficiary. The trust should be memorialized by a written trust agreement, outlining how the trust assets will be distributed to the beneficiary.
- Will – A written document with instructions for disposing of assets after death. A will can only be enforced through a probate court. A will can also contain the nomination of guardian for minor children.
If you have any additional questions about estate planning, or would like to consult an estate planning professional, please contact us today. We can make sure you have a comprehensive plan that is tailored to your unique needs and goals.
We publish vital information on health law, business law, IT law, and more every Wednesday and Friday. To get this important information delivered directly to your mail box, click here to Subscribe.
Do you need help with your policies and procedures or negotiating contracts with third-party vendors? We can help. To contact us about your legal needs: CLICK HERE.