- Estate planning
Estate planning is the process of accumulating and disposing of an estate to maximize the goals of the estate owner. The various goals of estate planning include making sure the greatest amount of the estate passes to the estate owner's intended beneficiaries, often including paying the least amount of
taxes and avoiding or minimizing probate courtinvolvement. Additional goals typically include providing for and designating guardians for minor children and planning for incapacity.
Estate planning tools
The tools involved in estate planning include the will, various types of trusts, beneficiary designations, powers of appointment, various forms of property ownership (
Joint tenancywith rights of survivorship, tenancy in common, tenancy by the entirety, etc), gifting, and powers of attorney, specifically the durable financial power of attorney and the durable medical power of attorney. After widespread litigationand media coverage surrounding the Terri Schiavocase, virtually all estate planning attorneys now advise their clients to also create a living will. Note that many people (and even some attorneys) confuse a living will with a durable medical power of attorney. The former controls solely those decisions that must be made at the end of the patient's life, while the latter is used to give decision-making authority to someone else (usually a family member or close friend). This person, the attorney-in-fact, then makes all medical decisions leading up to the person's death, but has no such power to make end of life decisions for the patient. Those decisions are made "by the patient" in the living will; in the absence of a living will, and where the patient is incapable of making end-of-life decisions for him or herself, such choices are left to family members.
The tax code allows wealthy people to set up charitable remainder trusts and set up
qualified personal residence trusts to own their personal residence yet leave it to their children without estate tax.
Because the United States tax code does not tax life insurance proceeds as income, a life insurance trust could be used to pay estate taxes. However, if the decedent holds any
incidents of ownershiplike the ability to remove or change beneficiary, the proceeds will remain in his estate. For this reason, the trust vehicle is used to own the life insurance policy and it must be irrevocable to avoid inclusion in the estate.
Estate planning mediation
Estate planning mediation serves as preventative measure against future litigation. In the mediation session, a person can include his/her family members and beneficiary organization representatives in their discussion about plans for transferring assets in the future. Because of the potential conflicts associated with blended families, step siblings, and multiple marriages, creating an estate plan through mediation allows people to confront the issues head-on and design a plan that will minimize the chance of future family conflict and meet their financial goals.
* [http://www.ncpg.org/ National Committee On Planned Giving website] organization for estate planners
Trusts and estates
Wikimedia Foundation. 2010.
Look at other dictionaries:
estate planning — estate plan·ning n: the arranging for the disposition and management of one s estate at death through the use of wills, trusts, insurance policies, and other devices Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. estate planning … Law dictionary
Estate Planning — The collection of preparation tasks that serve to manage an individual s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the… … Investment dictionary
estate planning — The preparation of a plan to carry out an individual s wishes as to the administration and disposition of his/her property before or after his/her death. Bloomberg Financial Dictionary * * * estate planning estate planning ➔ planning * * * estate … Financial and business terms
estate planning — That branch of the law which, in arranging a person s property and estate, takes into account the laws of wills, taxes, insurance, property, and trusts so as to gain maximum benefit of all laws while carrying out the person s own wishes for the… … Black's law dictionary
Board Certified In Estate Planning - BCE — A certification offered by the Institute of Business Finance (IBF) aimed at brokers, advisors and financial planners whose clients are interested in estate accumulation, preservation and distribution (estate planning). Qualified estate planners… … Investment dictionary
planning — plan‧ning [ˈplænɪŋ] noun [uncountable] when you think carefully about something you want to do in the future, and decide exactly how you will do it: • If you want to ensure a trouble free retirement, it s never too early to start financial… … Financial and business terms
Estate Planner — Estate Planner, a professional that creates an estate plan. This professional works with an estate owner to maximize their goals. This is a legal and tax specialty for an attorney or an accountant. Further, the key to estate planning is to help… … Wikipedia
estate planner — estate plan·ner n: a professional or business that provides advice regarding estate planning and sometimes prepares necessary legal documents Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
Estate tax in the United States — This article is about Estate tax in the United States. For other countries, see Inheritance tax. Part of a series on Taxation Taxation in the United States … Wikipedia
planning — noun ADJECTIVE ▪ careful, detailed, meticulous, thoughtful ▪ poor ▪ initial ▪ the initial planning stage … Collocations dictionary