At a person’s death there are certain typical problems which, if not planned for, create a burden on those who are left behind. Proper estate planning can eliminate or reduce these problems. There are three primary areas that should be addressed in advance to insure that the estate settlement minimizes the burdens for those left behind and that it follows your wishes.
Without proper planning, you may pay far more than you should in estate settlement costs. These costs consist primarily of probate fees and estate taxes.
- Probate fees: These are generally paid to the executor of the estate and the attorney who assists with the probate
- Estate taxes: Estates that exceed certain amounts may be subject to both state and federal estate taxes.
Estates that are improperly arranged can result in significant financial difficulties for loved ones:
- Liquidity: There are not enough liquid (cash type) assets to pay estate settlement costs.
- Cash Flow: There is not enough income to care for loved ones left behind; e.g., spouse and minor children.
Transfer of Assets
- Estate assets may be subject to probate delays and expense.
- Assets transferred to minors may be in cumbersome guardianship accounts until they attain age 18 (or 21 in some states) and are then distributed outright to the children.
- Additional estate taxes may be paid because there was no pre-death planning.
Care of Minors
- Guardians: Parents can nominate a guardian for their minor children in a will.
- Asset management: If the wrong persons are chosen to manage the assets left for the minors, the assets may be lost or unnecessarily reduced.
At Viti Financial we can provide you with comprehensive review of your individual circumstances to determine which estate planning strategies may work best for you . For more information, please contact one of our knowledgeable financial representatives.