Important issues to consider when drafting an estate plan

Californians might have a certain amount of difficulty considering the inevitable and moving forward with an estate plan, but it is a necessary step to ensure that the property and assets will go to their designated beneficiaries. It is also a sound way to avoid family disputes and rancor. There are, however, certain foundational aspects of drafting estate planning documents. Knowing what to take into consideration can avoid the need to make changes to the documents and keep the disagreements to a minimum once the testator has passed.

When drafting a will, it should be perfectly clear as to what the intentions are. The beneficiaries should be designated accurately and all eventualities taken into consideration. The titling of homes and properties can be confusing. Examples of how a title to a property is held include: being in the testator's name, having a joint tenancy with a right of survivorship, or being tenants in common. Without the knowledge of who retains the right to pass the property on to another, it cannot be included in an estate plan. Taxes are unavoidable and the estate tax is a frequent concern. Wealthier people will have to take this into account. For 2017, estates that have combined gross assets that go beyond $5.49 million will have to pay the estate tax. This could be up for change with the new president's administration.

Beneficiaries must be named in the document. The simple act of creating a will does not mean that the beneficiaries are clear. An example of circumstances in which there is confusion is when there are retirement benefits. Naming the beneficiaries on these plans can avoid any problems. There are options when it comes to retirement accounts, such as an inherited IRA. With this, the asset can keep the growth it accrued in tax deferment and the beneficiary can take distributions sans the penalty for early withdrawal.

Naturally, as time passes, it is wise to go over the estate plan and make certain that all the testator's desires remain in effect. Perhaps there was a divorce and there are changes that need to be made because of it. This is important to keep track of. Those who are taking the steps to move forward with estate planning and probate will need to make certain that they have a grasp of all the various issues that are key to the document being the way they want it. Discussing the matter with an attorney who is experienced in estate planning can help.

Source: finance.yahoo.com, "9 Estate Transfer Issues to Avoid," Feb. 28, 2017

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