Tips For Planning Your Estate

If you have dependents, then it is never too early to start estate planning, regardless of how much money you have or make. A proper estate plan will ensure that your loved ones are cared for and that your belongings are distributed as you see fit in the event of your death. Here are some tips that you might want to think about when it comes to estate planning:

Gifts

When someone dies, their estate must first go through probate, which means that the government will effectively tax it. In order to maximize the amount of your estate the goes to your loved ones rather than the government, you might want to consider gifts. By giving some parts of your estate to your loved ones before you die, you are essentially exempting those gifts from taxes. Of course, there are a couple of restrictions on such gifts, the most important of which is that the size of the gift may not exceed $14,000. If it does, then it may be taxed.

In a similar vein, you may donate certain assets to charities in order to reduce the amount of taxes that will be taken from your estate. The way this works is that certain assets may be taxed while others may not. If you donate some of those taxable assets to charity, they will be exempt from such taxes. This doesn't necessarily ensure that your loved ones will get more money, but it does mean that you can decide how much of your estate goes to a charity rather than the government.

Provisions

Some wills neglect to add provisions regarding how the funds from the estate should be used. If you want your estate to be used a certain way, then there is a good chance that you can have your desires added as legally enforceable provision. For instance, if you want a certain portion of money to be used exclusively for college, then you can easily set up a trust for that purpose. If you want certain individuals to be unable to access your estate (such as your children, who would otherwise be among the first in line through normal inheritance laws), then that is a simple matter as well.

However, if you add provisions that are excessive, then the court might actually reject those provisions during the probate process. Of course, if you are writing your will with a legal expert, they will likely be able to tell you which provisions are likely to be upheld and which are not.