When a loved one passes away, there’s a lot of work involved to ensure their assets will be managed and distributed accordingly. Estate planning is a key piece of financial planning to lessen the burden on the remaining family, preserve family wealth, or fund children’s education.
The probate process occurs while administering a deceased estate. During this process, the executor (typically determined by will) and court will identify the assets and liabilities associated with the deceased and transfer them to the beneficiaries. First they will settle debts and funeral costs, and then they will pass down the assets to family and friends as determined by the deceased in their will. If a will is not created, the state will appoint an executor which is usually a family member who comes forward. Probate can be a costly process and it may be subject to delay in transferring assets to heirs since it must go through a legal process.
Creating a Will
A will is a legal document that enables the testator to transfer property at the testator’s death in the manner that they desire. While you may understand the importance of a will, chances are you don’t actually have one written as it’s a dark concept to think about. But, the harsh reality is that if you die without a will, the division of your assets is left up to “strangers,” aka the aforementioned probate courts, without any insight into your life or relationships. You’ll want to make sure what you leave behind in the event of your death is put in the hands of the people you trust most. We’ll go through the types of wills that exist, explain choosing an executor, and decide if you need to do a contingent beneficiary election.
An estate tax is what’s placed on the assets being divided up to beneficiaries or heirs of the deceased. As of 2018, if you become deceased, the first $11.18 million of your estate will pass without any federal estate tax—and it’s doubled for married couples. We’ll review your current and planned assets, along with your will, to foresee any implications of estate tax that could come your family’s way in the event of your death.