It can vary from one person to the next and will be based on personal circumstances. However, the planned goal of estate planning will be consistent among all – ensuring your assets pass to beneficiaries in the intended manner and in the most tax-effective fashion.
Careful estate planning can also provide clarity for future beneficiaries. Should someone pass away without an appropriate estate plan in place, complications, family politics, and poor tax outcomes might unfortunately result.
Upon death, assets generally fall into one of the following two categories.
The first is estate assets, which are assets that you hold in your own name. This could include personal property, such as cars and jewelry, collectibles, loans, cash, shares, property, and other investments. These assets are dealt with in the Will, and would require going through probate upon your death before being passed on to your beneficiaries.
Non-estate assets include annuities, life insurance, company assets, Jointly owned assets, and trust assets. Furthermore, if you complete your estate plan properly, all of your other assets, including personal property and real estate, will be owned by your family trust and also protected from probate.
Family trust assets remain in the trust after the death of a settlor (the creator of the trust). The surviving trustees may have discretion to distribute the capital and income of the trust to beneficiaries, especially when minors are involved.
Company assets and jointly owned assets are also treated differently.
In the event of the death of a company director his/her shares will form an estate asset if held by the deceased personally; however, the company assets continue to be owned by the company.
Jointly owned assets, which are generally assets held in joint names, pass automatically to the surviving owner. There are some exceptions to this rule but they are less common.
Other important considerations:
A valid will is usually sufficient to direct the distribution of estate assets according to the deceased’s wishes. Nevertheless, the will can still be challenged by a person (typically a family member or an ex-spouse) who feel they have not received a fair share of the estate.
If a person dies intestate (without a will) or the will is invalid, the estate is administered under the laws relating to intestacy and the distribution of the estate assets will be governed by these rules.
Oregon follows a prescribed formula for determining heirs, and it may not be what you think, especially if you have children from prior relationships.
There are of course many other aspects to consider, such as a family business, how you choose the right executor or trustee, and appointing a power of attorney.
It is often said that wills and estate planning aren’t for the person who is deceased, but are more important for those we leave behind.
We all work extremely hard to build wealth and it should be appropriately structured so that it can be passed on as intended.
I would be pleased to help you set up your estate plan. A well-rounded estate plan includes:
- Living Trust
- Will(s)
- Powers of Attorney
- Advance Health Care Directive(s)
- Deed(s) retitling assets into the Trust
- Burial Instructions
- Dementia Directive
- Supporting Documents, such as LLC ownership transfers, instructions to banks, etc.
Prices on estate plans vary depending on the number of people involved and the amount of property you want to place into your trust. I am also happy to prepare individual legal documents, such as a simple Will, Power of Attorney, etc. Please call me at (541) 488-9465 to either discuss on the phone or set up an appointment for me to visit you at your home.
