Think you do not have anything to leave behind? Think Again! (Part 2 of 4) – Wills

Now that you have considered all of the various possibilities that you may amass a sizeable estate when you pass away, you then must consider to whom you would like the assets to pass to and, just as important, who will administer your estate.

First, the decision of who will inherit from your estate. A Last Will and Testament will dictate to whom your assets will pass to after your death. This provides you with all of the power to tell your loved ones after your death “who gets what” or “who does not get what”. This saves time and money after your death and saves loved ones from potentially fighting over your most prized possessions.

If you have children, you may consider where each child is in life or where you anticipate them to be at the time of your passing. Is one child better off than the other? Does one child need more support due to an incapacity issue? Or do you simply not have a relationship with one child and would not like that child to inherit from your estate? These are all important questions to ask yourself when considering estate planning documents, and each of them can be addressed in your Last Will and Testament. Do not leave it to the State to distribute your assets when you have the ability to control that yourself.

The Last Will and Testament governs the distribution of probate assets as opposed to non-probate assets. What is the difference? Non-probate assets are assets that already have a listed beneficiary on it for the assets to be distributed to upon your death. For example, life insurance, IRAs, joint bank accounts with rights of survivorship, payable on death accounts, are all types of non-probate assets. Each of these accounts will generally have an individual (beneficiary) already listed who will receive the assets of that account upon your death. However, if no beneficiary is listed, then the estate is the presumed beneficiary of the asset and it will then become a probate asset and will be distributed according to your Last Will and Testament.

In addition to cash assets, you may also consider your home if you own one. Who would you like to inherit your property? Do you even want anyone to inherit your home? Or would you like it to be sold first and distribute the proceeds? Again, these all can be addressed in your Last Will and Testament. This will take away any uncertainty with what will happen to your property after you pass away. You can rest assured that your assets will be distributed to the right people in the manner in which you desire when you pass.

When you have finished choosing who to leave your specific property to, what happens to the rest of the assets in your estate? The remaining assets, such as bank accounts, in your estate that do not have a listed beneficiary will pour into what is called the “residue” of your estate. You have the ability to direct how your residuary estate is distributed and to whom it will be distributed.

After considering what you have and to whom the assets will be distributed to, the crucial decision needs to be made as to who will be responsible for administering your estate. This should be person that you trust to be able to gather your assets and contact all of the beneficiaries of your estate in a timely manner to administer those assets from your estate. This person is called the “Executor” of your Estate. The Executor will also be responsible for the payment of any death taxes your Estate may owe as a result of your death and will be responsible for filing income taxes for your Estate as well. You may also list successor executors as well. These individuals will step in for your initially listed Executor should he or she choose not to serve as your Executor or becomes incapacitated and is no longer able to serve as Executor.

A will gives you great power and discretion to see that the proper people receive the assets of your estate. If you have life milestone moments coming up or do not have one, consider seeing an attorney to have your Last Will and Testament drafted.

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Immon Shafiei

About the Author

Mr. Shafiei focuses his practice in the areas of estate and tax planning, estate administration, small business representation, business succession planning, elder law, and probate litigation. Mr. Shafiei represents national and regional lending institutions and other credit issuing entities in the areas of commercial litigation, collections, bankruptcy, work outs, and foreclosure in litigation and arbitration matters. He also practices in the representation of individuals, small businesses, and large corporation in complex commercial and estate litigation matters.

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