Estate Planning Tips to Reduce Family Disputes Over Inheritance

Sadly, family disputes over inheritance are a common occurrence. As a probate liquidator, I’ve watched countless feuds erupt in courtrooms over personal belongings and valuable assets. One thing is certain. Death can unite or separate families and separation often takes place when decedents usually do not take part in estate planning.

While estate planning cannot prevent family disputes over inheritance it can minimize the risk of heirs contesting the Will and ensure heirs receive intended inheritance gifts. The level of estate planning strategies required is dependent upon several factors including type and value of owned assets, the number of heirs, and state probate laws.

Every estate is necessary to undergo the probate process unless assets are protected by the trust. Trusts tend to be used when estate value exceeds $100,000. Some states exempt small estates from undergoing probate so long as a legitimate Will has become executed.

Executing a testament is important since it provides estate settlement directives, including how property must be distributed. Wills can also be crucial when you have minor children since they appoint legal guardianship. Other important directives range from burial preferences, charitable gifts and donations, and disinheritance of heirs.

While a lot of people don’t need to disinherit loved ones, if there is a desire for this the sole legal strategy is to feature a disinheritance clause. It is strongly recommended to consult using a lawyer to determine the appropriate manner for disinheriting heirs. Some states allow decedents to entirely write somebody out of your Will, while some require a minimal gift of one dollar.

Individuals who will be concerned that heirs might contest the Will can insert a no-contest clause. This action declares that heirs who contest the Will relinquish rights to the estate assets. No-contest clauses could be a good preventative measure to … Read more ...

Estate Planning and Tax Consequences

One common facet of estate preparing for everyone, however, is the requirements into consideration the possible tax consequences of estate planning. Both estate taxes and/or gift taxes are effective in reducing the assets with your estate up to 55 percent without careful estate planning ahead of your energy. A basic comprehension of how estate and gift taxes operate can help you understand the requirement for thorough estate planning.

– Estate Taxes:

When you die, your estate assets must be inventoried and valued as of the date of death. The total of most estate assets is then potentially subject to estate taxes. Your estate might take advantage of the existing exemption amount that refers to all estates. The exemption amount fluctuates every year. For 2012 the exemption amount is $5,120,000 — an all-time high. For 2013, however, it is set to return to $1 million unless Congress passes a whole new tax law. All assets over the exemption amount are going to be taxed. The tax rate also changes every year on account of modifications in the federal tax laws passed by Congress. Although the tax rate for 2012 reaches 35 %, that, too, is scheduled to improve to 55 percent for 2013 unless Congress acts. Unfortunately, there is no way to find out if you will die or what the actual exemption amount or tax rate will probably be. Planning for the worst-case scenario is most beneficial.

– Gift Taxes:

In the event you are planning that gifting your estate assets just before death may be the solution to avoiding estate taxes, reconsider. Gifts may also be taxed should they be over the lifetime exemption amount. These amounts, just like the estate exemption and tax rate amounts, will also be subject to change every year as federal tax laws change. … Read more ...