Estate planning is the process of implementing a strategy of distributing your assets in an efficient manner upon your death. This process also addresses incapacity planning, and there are certain documents that appoint an individual to make health-care and financial decisions for you in the event that you are unable to make these decisions for yourself. If you are a parent of minor children, an estate plan also addresses who will serve as guardian of your children.
One of the biggest initial questions in the estate planning process is whether you should create a Last Will and Testament (“Will”) or a Revocable Living Trust (“Trust”).
A Will is a document that sets forth (1) how you would like your assets to be distributed upon your death, (2) who will be the Personal Representative of your estate to manage the probate process, (3) who will be the guardian of any of your minor children, and (4) your cremation or burial instructions, if any. A Will disposing of assets of your estate is subject to the probate process. Probate is a court- supervised process where your assets are re-titled from your name to the name of your beneficiaries. Because it is court-supervised, it can be time- intensive and expensive. Probate in Clark County can span six months to a few years, and it can cost anywhere between 3% to 10% of your gross estate.
A Trust is a document that sets forth how you would like your assets to be distributed upon your death, and it appoints an individual to serve as trustee. During your lifetime you are the Trustee and can manage the Trust in any way that you desire. Upon your incapacity or death, your Trust appoints a successor Trustee to mange the assets for your benefit or for the benefit of your beneficiaries. A properly funded Trust avoids probate, and therefore, a Trust’s administration is generally private, less expensive and time efficient.
Wedl Law Firm will help you determine whether a Will or a Trust is the appropriate document for you. The answer to this question depends on the size and nature of your estate, your family dynamics, your need for privacy, and your desire to minimize claims against your estate.
While a Will or a Trust is the fundamental building block of a proper estate plan, your estate may require some additional planning. One common area of additional planning addresses estate tax planning for those estates that exceed the estate tax exclusion amount. Under the American Taxpayer Relief Act of 2012 (“ATRA”), which was enacted in January 2013, every individual has $5,000,000.00 that he or she can pass estate-tax free upon death. This estate tax exclusion amount of $5,000,000.00 is adjusted for inflation each year. The 2013 inflation-adjusted estate tax exclusion amount is $5,250,000.00 per individual. Therefore, if your estate exceeds the sum of $5,250,000.00 or is poised to exceed this amount, then we will explore estate tax planning techniques that would be in harmony with your wealth-transfer goals. Closely entwined with the estate tax are the additional areas of gift taxes and the generation-skipping tax. Our conversations will address the interplay of all of these “transfer taxes.”
Another area of additional planning addresses asset protection. Whether you work in a high-liability profession, own rental properties, have received a large inheritance, or are anticipating a marriage, there are many asset protection techniques that address your unique present and future in a manner that provides some protection from future or anticipated creditors. I will assist you in addressing your asset protection needs and concerns, and I will recommend techniques that are commensurate with your appetite for risk-avoidance.
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