Estate planning can be a long process but well worth it in the long run. With the help of a lawyer or attorney, the task can be completed in no time. Whether you believe it or not, just about everyone has an estate. Your estate could be your car, home, checking or savings accounts, investments personal possessions and much more.
Estate planning is basically an arrangement for distribution of one’s wealth, property and assets after they have passed in a form of a will or trust. It is best to make your own plan, if not the state will make one of their own.
“Estate planning is important because you have the absolute right to designate what you want to happen to your assets upon your death if you have not already provided for such disposition during your lifetime,” Ronald L. Wilson of Badell & Wilson, P.C. said. “By that I mean, it is your property, you should direct its distribution as you so wish rather than having the State of Indiana ultimately do that on your behalf.”
Planning your estate now will benefit you in the end. Whether you’re young or old an estate can benefit you tremendously. If you act now, you won’t have to worry about what could happen to your family if your life doesn’t follow the normal progression or even making bad decisions when you are running out of time.
“A will needs to be prepared whenever a person has assets that he or she owns in their own name, that are not jointly owned with a spouse or some other individual,” Wilson said. “That instrument, again, directs what you want to happen to those assets upon your demise. You can also establish a trust during your lifetime or in the will, which provides for distribution of your assets at your death which is advisable especially if you have children under age 18 or if you have older children who have not yet, in your judgment, achieved maturity to deal, responsibly, with assets that they control or could ultimately control.”
Establishing a trust is important for several reasons.
“One of the main reasons for establishing a trust during your lifetime is to divide your estate into two pieces, one of which is yours and one of which is your spouse’s. This would then permit or provide for taxation upon death only one time, that is to say possibly upon your spouse’s death, not upon your death, assuming you leave everything to your spouse, which would result in no death taxes in that event. The Federal Death Tax is effective whenever someone owns more than 5.25 million dollars in assets upon their death and has not transferred that to their spouse or some other individual or entity during their lifetime. Indiana does not have any death taxes at this time so therefore there is nothing to attempt to do to avoid a non-existent tax,” Wilson stated.
When becoming an adult a will is something that should be thought about more often than not.
“Anyone who has children under age 18 needs to, in my opinion, have a will while those children are still in your home, have not moved out, are not grown and on their own,” Wilson said. “This is because Indiana laws provide that if a person passes away and has an heir who has a child over 18 he or she will have possession of those assets at that age. Many times an individual at that age does not have the maturity or common sense to deal with any asset that has value in excess of $2,000 or $3,000 if even then. If you want to avoid someone making unwise decisions with assets that you worked to accumulate and own, you need to have a will with a trust provision in it for your child or children which would prevent them from having assets dumped in their lap at age 18. Those individuals who have assets that are valued at more than 5.25 million dollars should start thinking about it and more importantly establish a trust to provide for those assets disposition upon the individuals deaths and to provide for such disposition in a way that will not trigger Federal death tax consequences and can still provide for the surviving spouse’s needs.”
When deciding to start a will or trust, one must be prepared with the correct documents.
“The documents that would be helpful to start the process assuming it is a will or a trust would be some outline of the assets and the value so the planning can then be made with respect to first of all what the individual wants to do or wants to have happen with his or her assets and then choices can be given as to how that can occur to those individuals,” Wilson stated. “If there is going to be trusts established during the lifetime of the individuals, there will need to be transfers of property to trusts, if the property is real estate, new deeds will have to be prepared, things of that nature.”
Once a will or trust is finished, it is not set in stone until the person is ready.
“Finally with respect to changing or altering trusts or wills, those changes can be made at any time and as often as is desired as long as the individual wanting to make the changes has the mental competence necessary in that regard,” Wilson said.
Once you have put your hard work into the estate planning process, it is best to leave a copy with your lawyer or attorney or in a safe deposit box at your local bank. A well planned estate is a great legacy to leave your family when the time comes.
Contact: Kate Thurston at 765-932-2222, ext. 105