What Happens If We Die Without Having An Estate Plan In Place?
Estates over twenty-five thousand dollars that include real estate require probate. The downside to probate is that it is a six to 18-month long process. There’s no privacy involved. Everyone in the entire family is invited to participate, whether you wanted them involved or not. Every creditor is notified and the cost, by the time we factor in attorneys, accountants, taxes, and appraisers, equals three to five percent of the gross value of the estate. That doesn’t take long to turn into a significant sum of money on even a modest estate. A $300,000 to $500,000 home could end up costing you $10,000 to $20,000 to run through probate. If you don’t have any kind of estate plan, the state is going to decide where your assets go and who your beneficiaries are. Most people want to make that decision for themselves.
What Components Of A Client’s Life Must Be Analyzed When Setting Up An Estate Plan?
Not all families nowadays are the typical husband, wife, and two children. You’ve got stepchildren or unconventional couples who are not married. When setting up an estate plan, you need to look at the age of the beneficiaries. You certainly don’t want to dump a large estate on an 18-year-old. Their tax situation should be considered as well. All of these kinds of things need to be thought through, especially with a situation where there are children from previous marriages or separate property.
What Are The Main Components That Constitute An Effective Estate Plan?
There are quite a number of different options but the core items for a modern estate plan would be a revocable living trust, a pour over will that pours over into the trust, a healthcare power of attorney, and an advance directive, which lets doctor know who you would want to make decisions for you, if you’re unable to make your own decisions about health care. There are other documents, like a general power of attorney and other supplemental documents, but the basic three are will, a trust, and the health directive.
What Is The Purpose Of A Trust? What Are The Advantages Entailed In A Trust?
There are many different kinds of trusts with different goals. There are specific asset protection trusts, whose goal is to isolate and protect protected assets. There are even gun trusts, which have a specific purpose under federal law regarding certain types of firearms. Most people need a will substitute and that is a basic family revocable living trust. The main advantage is that it allows for a streamlined process when you’re either incapacitated or you’ve passed on.
A will does nothing for you while you’re still alive. You could be hospitalized and unable to handle your own financial affairs and a will does absolutely nothing for you. A trust, however, can name someone to keep the estate in order and all the finances afloat until you’re able to resume management of your assets or you pass on. Usually, during your lifetime, these kinds of trusts are completely amendable. You can revoke them, add things to them, take things out of them, and you don’t really lose control of your assets in any way.
Once you pass on, the trust becomes fixed. A new trustee is named to take over and do whatever it is that you’ve asked to be done. A will is going to just distribute the money immediately and outright to anyone over the age of 18. With a trust, you’ve got plenty of flexibility to tailor it to your family’s needs. You can deliver some of the money at age 18 and some later in life. You could give the trustee discretion to make preliminary distributions for educational needs, medical needs, or a down payment on a house. As long as it’s not illegal behavior, you can be as creative as you want with these requirements.
For more information on Dying Without An Estate Plan In Nevada, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (702) 829-7222 today.
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