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What Is Estate Planning?

Estate planning is the process of preparing duties to handle a person's assets in the case of incapacity or death. The transfer of assets to heirs and the settlement of estate taxes are all part of the preparation. The majority of estate plans are created with the assistance of an estate law practitioner.

Preparing a Will

A will is a legal document that specifies how an individual's property and, if applicable, custody of minor children should be handled after death. The document outlines the individual's desires and designates a trustee or executor whom they trust to carry out their expressed intentions. This will also specify whether a trust should be established following the decedent's death. A trust can be established during the estate owner's lifetime (living trust) or after their death (death trust), depending on their wishes (testamentary trust).

A legal process called probate is used to determine the validity of a will. The first stage in administering a deceased person's estate and distributing assets to beneficiaries is to file for probate. When a person dies, the will's custodian must deliver the will to the probate court or the executor specified in the will within 30 days of the testator's death.

What is a Trust?

A trust is a legal agreement in which one person (the settlor) authorizes another person (the trustee) to keep assets that will subsequently be transferred to a beneficiary or a third person.

The settlor must follow specific processes and fulfill certain conditions in order to establish a legal trust. They have to:

• Intend to build a relationship of trust.
• Search for and designate a trustee.
• Deposit money into the trust (the money is known as the "trust res").
• Name the people who will receive the trust's assets.

Although most trusts are formed during the settlor's lifetime, certain trusts are created with the intention of outlasting the settlor. When the beneficiaries are not ready to accept or manage the property that has been handed to them, trusts are frequently used.

The beneficiaries may, for example, be young children who are not yet ready to own the property. Trusts are particularly advantageous since they operate outside of the probate system and can help you avoid expensive legal fights.

Choosing the Most Appropriate Executor

The court-appointed legal personal representative or executor is in charge of identifying and supervising all of the deceased's assets. According to the Internal Revenue Code (IRC), the executor must assess the worth of the estate using either the date of death value or the alternative valuation date.

Retirement funds, bank accounts, stocks and bonds, real estate property, jewelry, and any other valuable things are among the assets that must be evaluated during probate. The majority of assets subject to probate administration. It is supervised by the probate court in the location where the decedent lived at the time of death.

Real estate, on the other hand, must be probated in the county where it is located. Because of these reasons, hiring specialized real estate attorney queens NY based services from firms like Radow Law Group is important.   

The executor is also responsible for paying any taxes and debts that the deceased owes from the estate. Creditors often have a limited period of time after being notified of the testator's death to file claims against the estate for money owing to them. Claims that the executor rejects can be taken to court, where a probate judge will determine whether or not the claim is legal.

Estate Planning with Life Insurance

Life insurance is used to pay for death taxes and expenses, invest in buy-sell agreements for businesses and retirement programs. Any income tax on presumed dispositions of assets following an individual's death can be paid without resorting to asset sales if adequate insurance proceeds are available and the policies are correctly arranged. The proceeds of life insurance received by the beneficiaries upon the insured's death are typically tax-free.

Estate planning is a continuous process that should begin as soon as a person has any quantifiable assets. As your life develops and your goals change, your estate plan should adapt to meet your new objectives. Lack of proper estate planning can place an excessive financial strain on loved ones (estate taxes can be as high as 40%), therefore a will should be made at the very least—even if the taxable estate is not big.

Conclusion

If you need help writing a will or managing your estate in any other way, you should hire expert estates law attorneys from Radow Law Group for assistance. Radow Law Group provides real estate attorney queens NY based services that can give you legal advice and represent you in the event of a disagreement. As you can see, estate planning encompasses a wide range of issues, but hiring an estate attorney may help you through the process.