Plan Your Estate

✍ Scribed by Denis Clifford Attorney

• Publisher: NOLO
• Year: 2022
• Tongue: English
• Leaves: 545
• Edition: Sixteenth
• Category: Library

✦ Synopsis

Turn to Plan Your Estate for straightforward, plain-English explanations of each of your estate-planning options, so you can make the best decisions for you and those you love.

Attorney Denis Clifford shows you how to:

• avoid probate
  
• leave property through a will or trust
  
• use life insurance to provide for your loved ones
  
• name a guardian for your minor children
  
• leave property to a young person
  
• plan for incapacity
  
• implement strategies specific to business owners
  
• reduce estate taxes
  
• make final arrangements
  

This book is for seniors doing end-of-life planning, parents planning for their young children’s futures, adult children helping their parents make end-of life plans, as well as readers of any age who want to learn about estate planning.

No matter what category you fit into, if you’re like most people, you understand that estate planning is a good idea. You know that estate planning ensures that your property will pass to the right people with minimal delay, red tape, and cost. And if you do have young children, you likely know that you need an estate plan to have a say in who will care for your children if you’re not around to do it. Perhaps you even know that you can use your estate plan to leave specific instructions about your finances and medical care in case you become incapacitated and unable to make those decisions for yourself.

Although you may know all of that, it’s all too easy to put off actually sitting down and making your plan. We understand. Estate planning is not easy—first, because it forces you to think about your mortality, and second, because of the legal complications and legal fees that often come with it.

Plan Your Estate is here to help. This book explains estate planning in plain English, step by step, option by option. Once you know your choices, you can confidently move toward making an estate plan that fits your circumstances and wishes.

Plan Your Estate covers these estate planning goals:

• Leaving property. If you are not wealthy, you might use a simple will or living trust, or both. You can also use co-ownership, transfer-on-death accounts, or beneficiary designations. If you have a large estate, you might also leave property to beneficiaries in more complicated ongoing trusts. No matter how you leave your property, it is better to have a plan—if you die without one, state law will decide who gets what.
  
• Providing for young children. If you have young children, you’ll want to ensure that they will be well cared for if you die before they become adults. In your will, you can name guardians to raise them and managers to look after their inheritance. You’ll also likely want to buy life insurance to make sure that your kids have money after you’re gone.
  
• Planning for incapacity. Part of estate planning is preparing for what would happen if you ever became unable to make medical and financial decisions for yourself. You can use a health care directive to name someone who will make medical decisions on your behalf and to express your wishes about end-of-life care. You can also prepare a durable power of attorney that gives a trusted person control of your finances. Preparing these documents can save your family much heartache.
  
• Avoiding probate. Probate is a court-run process for wrapping up an estate. It’s often expensive and time-consuming, yet rarely provides any benefit to the beneficiaries. Thankfully, with a little planning, probate is fairly easy to avoid. Trusts, pay-on-death accounts, joint tenancy, and other probate avoidance methods can keep most or all of your estate out of probate, saving your loved ones time and money.
  
• Reducing estate tax. Most people won’t owe federal estate tax. But if you expect to leave over $11 million (or $22 million as a married couple), you’ll probably want to use your estate plan to reduce the tax that your estate could owe after your death.
  

If all this sounds overwhelming, please keep in mind that many people need only a simple estate plan. You may be able to prepare all your documents yourself. Or you might discover that you have some pretty complicated estate planning needs that will require advice from a lawyer. Most likely, you’ll find yourself somewhere in between. No matter what your situation, with Plan Your Estate on your side you can go forward informed and empowered to make a smart and effective estate plan.

Estate planning is an invaluable gift to yourself and to your loved one. It will feel great to get it done, and you can start right here with Plan Your Estate.

(Note: This book contains no estate planning forms, but it does tell you how to get the forms you need.)

✦ Table of Contents

Cover
Title Page
Table of Contents
Your Estate Planning Companion
1: Your Estate Planning Goals
Part I: Setting Your Goals
Part II: Laying the Groundwork
Part III: Children
Part IV: Wills
Part V: Probate and How to Avoid It
Part VI: Understanding Estate and Gift Taxes
Part VII: Reducing or Eliminating Estate Taxes
Part VIII: Imposing Controls Over Property
Part IX: Taking Care of Personal Issues
Part X: Family Business Estate Planning
Part XI: Going Further
Part XII: Sample Estate Plans
2: Personal Concerns and Estate Planning
Avoiding Conflict
Leaving Unequal Amounts of Property to Children
Providing Care for Minor Children
Subsequent Marriages
Long-Term Care for a Child With Special Needs
Concerns of Unmarried Couples
Worries About the Effect of Inheriting Money
Disinheriting People, Including Children
Communicating Your Decisions to Family and Friends
3: Special Property Ownership Rules for Married People
What You Need to Know
Marital Property in Community Property States
Marital Property in Common Law States
Moving to a Different State
4: Inventorying Your Property
Instructions for the Property Inventory Worksheet
Your Property Worksheet
5: Your Beneficiaries
Types of Beneficiaries
Primary Beneficiaries
Life Estate Beneficiaries and Final Beneficiaries
Alternate Beneficiaries
Residuary Beneficiaries
Gifts Shared by More Than One Beneficiary
Establishing a Survivorship Period
Explanations and Commentary Accompanying Gifts
Disinheritance
Simultaneous Death
Property You Give Away by Will or Trust That You No Longer Own at Your Death
6: Children
Naming Someone to Take Custody of Your Minor Children
Naming an Adult to Manage Your Child’s Property
How Your Children’s Property Should Be Managed
Tax-Saving Educational Investment Plans
ABLE Accounts for People With Disabilities
Naming Children as Beneficiaries of Life Insurance
Leaving Property to Children Who Are Not Your Own
Disinheritance
Children Conceived After a Parent Dies
7: Wills
A Will as the Centerpiece of Your Estate Plan
A Backup Will With a Comprehensive Estate Plan
What Makes a Will Legal?
Types of Formal Wills
What Property Cannot Be Transferred by Will?
Explanatory Letters Accompanying Your Will
Can My Will Be Successfully Challenged?
Keeping Your Will Up to Date
8: Probate and Why You Want to Avoid It
What Is Probate?
Probate Fees
Avoiding Probate
When You May Want Probate
Debts, Taxes, and Probate Avoidance
Probate Reform
9: Living Trusts
Does Everyone Need a Living Trust?
Living Trusts Explained
Major Decisions in Creating a Living Trust
Creating a Valid Living Trust
Keeping Your Living Trust Up to Date
10: Joint Tenancy and Tenancy by the Entirety
What Is Joint Tenancy?
Joint Tenancy Bank Accounts
Joint Tenancy Safe Deposit Boxes
Tenancy by the Entirety
Joint Tenancy in Community Property States
Tax Concerns Affecting Joint Tenancy
Drawbacks of Joint Tenancy
When Joint Tenancy Makes Sense
Creating a Joint Tenancy for Property With Documents of Title
Creating Joint Tenancy for Property Without Documents of Title
11: Pay-on-Death Designations, Registrations, and Deeds
Pay-on-Death Bank Accounts
Naming a Payable-on-Death Beneficiary for Government Securities
Naming a Beneficiary for Stocks and Bonds
Vehicle Registration
Transfer-on-Death Deeds for Real Estate
12: Life Insurance
Do You Need Life Insurance?
Types of Life Insurance
Life Insurance and Probate
Choosing Life Insurance Beneficiaries
Reducing Estate Tax by Transferring Ownership of Life Insurance Policies
13: Retirement Benefits
Social Security
Individual Retirement Plans
Standalone Retirement Trusts
Pensions
When You Retire
Retirement Plans and Estate Planning
Probate and Taxes
14: State Law Exemptions From Normal Probate
Will Your Estate Qualify?
Using These Rules to Plan
Summary of State Law Exceptions to Normal Probate
California Exemptions From Normal Probate
15: Estate Taxes
Federal Estate Tax Exemptions
The Big Picture: Estate and Gift Taxes
Will Your Estate Have to Pay Taxes?
Calculating and Paying Estate Taxes
Reducing Federal Estate Taxes
The Federal Income Tax Basis of Inherited Property
State Inheritance and Estate Taxes
16: Gifts and Gift Taxes
The Federal Gift Tax: An Overview
What Is a Gift?
How the Federal Gift Tax Works
Using Gifts to Reduce Estate Taxes
When Not to Give Property Away: Tax Basis Rules
Using Gifts to Reduce Income Taxes
17: An Overview of Ongoing Trusts
Trusts to Reduce Estate Taxes
Ongoing Trusts Used to Control Property
Ongoing Trusts and Avoiding Probate
What Ongoing Trusts Can’t Do
When Ongoing Trusts Begin and End
The Trustee
Taxation of Ongoing Trusts
18: AB Disclaimer Trusts
How AB Disclaimer Trusts Work
Is an AB Disclaimer Trust Right for You?
Choosing Trustees for an AB Disclaimer Trust
Do You Need a Lawyer to Create an AB Disclaimer Trust?
19: Other Estate Tax-Saving Marital Trusts
QTIP Trusts
Trusts for Noncitizen Spouses: QDOTs
Marital Deduction Trusts
20: Charitable Trusts
An Overview of Charitable Trusts
The Income Tax Deduction
A Closer Look at Charitable Remainder Trusts
A Closer Look at Charitable Lead Trusts
21: Other Estate Tax-Saving Trusts
Generation-Skipping Trusts
Irrevocable Life Insurance Trusts
Grantor-Retained Interest Trusts: GRATs, GRUTs, and GRITs
22: Disclaimers: After-Death Estate Tax Planning
Advantages of Disclaimers
IRS Rules for Disclaimers
Including Disclaimers in Your Estate Plan
23: Combining Estate Tax-Saving Trusts
Combining Two Estate Tax-Saving Trusts
Combining a Charitable Trust With Other Estate Tax-Saving Trusts
24: Property Control Trusts for Second or Subsequent Marriages
Evaluating Your Situation
How a Marital Property Control Trust Works
Restricting the Surviving Spouse’s Rights Over Trust Property
The Role of the Trustee
Working With a Lawyer
25: Trusts and Other Devices for Imposing Controls Over Property
Educational Trusts
Trusts for People With Special Needs
Spendthrift Trusts
Sprinkling Trusts
Trusts to Manage Your Own Property
Powers of Appointment
Combining Property Control Trusts
26: Incapacity: Making Medical and Financial Decisions
Medical Decisions
Financial Decisions
Guardianships and Conservatorships
27: Body and Organ Donation, Funerals, and Burials
Making Your Own Choices
Leaving Written Instructions
Donating Your Body or Organs
Death Notices and Obituaries
Services and Ceremonies Following a Death
Funerals
Cremation
Burials
You Can Choose a Green Burial
28: Family Business Estate Planning
Operation of the Business
Reducing Estate Taxes
Avoiding Probate of a Family Business
29: Using Lawyers
Hiring a Lawyer
Doing Your Own Research
30: After You Complete Your Estate Plan
Storing Your Estate Planning Documents
Revising Your Estate Plan
31: After a Death Occurs
Wills
Probate-Avoidance Living Trusts
Ongoing Trusts for Estate Tax Savings or Property Management
Preparing and Filing Tax Returns
Trustee’s Reports to Beneficiaries
Collecting the Proceeds of a Life Insurance Policy
Obtaining Title to Joint Tenancy Property
Digital Assets
32: Some Estate Plans
A Prosperous Couple in Their 60s and 70s
A Wealthy Couple in Their 70s
A Single Man in His 60s
A Younger Couple
A Single Mother in Her 30s
A Widow in Her 80s
A Couple in Their 60s, in a Second Marriage
An Unmarried Couple in Their 40s
Glossary
Index
Book Registration