The Complexities of Estate Planning

Helping individuals and families deal with the complex issues of estate planning is both rewarding and challenging. It is crucial that a family is prepared legally as they deal with the emotional issues involved as family members age and ultimately pass away. It is even more difficult when the death is sudden and unexpected.

Among the more challenging aspects of estate planning is the complex variety of terms that families will hear. While it should not be, that alone could be reason enough to put off appropriate planning.

So in this blog and others that will appear here in future weeks, I will try to eliminate that challenge by offering simple-to-understand definitions for some of the terminology you hear when discussing estate planning.

Assets – An asset is anything you own that has some economic value. While some assets may have significant value – such as a home – other assets with more limited worth need to be considered as well when you are trying to determine the total value of an estate.

Intestate – This is something none of us want to have happen. Intestate is the legal term used when someone passes away and has not created a valid will or other binding declaration about what to do with their assets. This often happens for several reasons. It is possible, if a death was unexpected, that a person did not think they needed a will yet, or they did not want to think about planning for their own death. Another possibility is that they did not believe they had enough assets to warrant a will. But even if a person does not have a great deal of assets, there may be family heirlooms or other memorabilia that your heirs may end up fighting over.

Estate Tax – This is a tax placed on assets that are transferred to family members or others upon your death. Among the things that would fall under an estate tax are cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. Proper estate planning can help offset estate taxes.

Beneficiary – Generally, a beneficiary is a person who is eligible to receive distributions from a trust, will or life insurance policy. Beneficiaries can either be named specifically in any of these documents, or they may have met any requirements that make them eligible for the specific distribution.

As I said, this is just a start to Estate Planning 101. More terms and definitions will be coming soon.

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