How To Set Up An Estate Plan

What makes up the “Estate”?

Estate planning is the process by which a client’s estate is conserved, invested, managed, and ultimately passed on to others. Estate planning should always begin with a careful consideration of the client’s estate. For estate planning purposes, a client’s “estate” may be regarded as all of the property that the client owns or in which the client has an interest. The client’s estate will include items that the client owns outright, as well as items held by trusts in which the client is either an income or a remainder beneficiary.

Probate Estate

The probate estate can best be understood as all of a decedent’s assets that cannot legally be transferred to the persons entitled to receive them without an order of distribution issued by a probate court. If there is some other way of transferring those assets, they are not included in the “probate estate.”

Assets that can be transferred in other ways include such items as property held in

Trusts, joint tenancy assets, accounts in banks or other savings institutions with “pay-on-death” payees, multiple-party accounts, the proceeds of life insurance policies that are not payable to the estate or the personal representative of the estate, and the proceeds of retirement and pension funds with designated “pay-on-death” beneficiaries.

Taxable Estate

“Taxable estate” consists of all of the items of property that the client owns, or in which the client has an interest which are subject to estate taxation upon the client’s death. For estate tax purposes, the taxable estate is properly determined by first determining the value of the client’s “gross estate” and then deducting the items entitled under the estate tax law to be deducted.

Estate Planning Tools

1. Will

2. Revocable Inter Vivos (Living) Trust

3. Irrevocable Inter Vivos Trust

4. Co-Ownership of Property

5. Life Insurance

6. Lifetime Gifts

7. Durable Powers of Attorney

8. Contracts

9. Uniform TOD Security Registration Act

10. Non-probate Transfers to a Former Spouse

11. Revocable Transfer on Death Deed