Estate Planning: So you can decide who will inherit your assets
Estate planning is the
process of deciding how to effectively transfer your assets, at death, and during
your lifetime. Without proper Estate
Planning you could unnecessarily lose a sizable portion of your estate to
taxes. While avoiding taxes is an obvious reason for Estate Planning, a more
important reason may be in its ability to allow you to direct the transfer of
your assets after death.
If you have an old Will, it may be time
for an upgrade.
Once executed, your will should be updated regularly, especially under these circumstances: A birth, marriage or divorce in the family; a move to another state; a change in tax
laws; a change in the status of dependent children; impending retirement; or a
change in personal circumstances or needs.
An out-of-date will can be more trouble than
having no will at all. Consider a situation involving a man who executed a will
in 2001, giving $10,000 to a woman he named as a "friend." A year
later, the man and woman get married.
The man dies in 2004. Unfortunately, the man never updated his will. At
her husband's death, the woman claimed her elective share as a wife (one-third
of the total estate) rather than abiding by the terms of the will. The man's
children from his first marriage objected. The court could decide that the surviving
spouse is limed to $10,000.00 from the estate.
The following is 10 life changes that have the potential to affect your estate
and would indicate the need for a revised Will:
- Births
- Marriage or divorce-yours or one of your
children's
- The death or incapacity of a named beneficiary in
your will
- Changes in your personal net worth
- Change of your needs or your beneficiaries' needs
- Change of residence-Do you now live in a
different state? Check the laws of that state.
- Changes in the tax law
- Change of personal representative of your estate
or guardian of dependents under your care
- New charitable interests
- Retirement
What Happens If You Die without a Will?
If you don't have a valid will, the state
where you are domiciled (i.e., the state in which you live most of the time,
vote, have your driver's license) will decide what happens to your assets. For example, in Georgia, if you die leaving a
surviving spouse and two children, and no will, the surviving spouse does not
inherit the estate.
Planning for Your Will.
If you are married or single, if you have
children or relatives, you need a will. If
you have charitable causes you want to help perpetuate, you need a will. If you
own a home or have a bank account, stocks or any other kind of property, you
need a will.
Having your will prepared by an attorney and
executed according to state guidelines is essential. Several steps are
necessary for a will to be legal.
- It should be in writing.
- It should be signed by the one creating the will.
- It should be acknowledged to be the will of the
person who signs it.
- It should be dated.
People who are not beneficiaries of the will
must witness the signature of the person who creates the will. They must also sign
it as witnesses. Also, if a will is
notarized by a third witness it makes the process of probating the Will much
easier.
Kevin J. Pratt
Attorney At Law
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