"Basic Estate Planning Concepts"

I. Estate Planning is the creation of a clear and specific plan for managing property and investment assets while an individual is living, and for distributing these assets after the decedent’s death.
A sound estate plan has four primary objectives from a Christian perspective:

1) To assure that the assets reach heirs and the Lord’s work in the manner the decedent intended.
2) To maximize the preservation of the assets within the estate.
3) To minimize the estate’s erosion by unnecessary legal fees, court costs, and estate or income taxes.
4) To glorify God in the decedent’s final “act of stewardship”.

II. Wills: A Last Will and Testament is a legal document that provides a formal means by which an individual can control the transfer of his assets after the decedent’s death. It is a written document setting forth the disposition of probate property. The “Testator” is the person making the will. A valid Last Will accomplishes the following objectives:

1) It eliminates the problems associated with intestacy (dying without a valid Last Will and Testament).
2) It avoids unnecessary estate shrinkage and the estate settlement process can proceed quickly and with minimal cost.
3) It assures that survivors or beneficiaries will receive assets intended by the testator.

 

If a person dies without a Last Will, the decedent died “intestate”. In the absence of a valid Last Will, the intestacy laws of the decedent’s domiciled state will order the distribution of the “Intestate’s assets. Not only may assets be distributed differently than the deceased’s intentions, but the estate may also be subject to increased taxes based on how the state distributes the assets. When the decedent’s heirs involve minor children, these surviving beneficiaries may be subject to State appointed guardians and/or Trustee’s that are perhaps Unsaved, Unethical and Uncaring!!!

III. Probate: is the process of proving the decedent’s Last Will before the court when an individual dies with property titled in the decedent’s name. Probate is the state’s legal procedure for handling two major functions for the estate:

1) The identification of the rightful heirs to the estate and the share that each heir will receive; and
2) Transferring the legal title of the property from the name of the decedent and into the name of the heirs.

The Probate process prevents fraud in transferring a deceased person’s assets, and protects inheritors by promptly resolving creditors’ Claims. Because all probate matters are made public, the family’s privacy is at stake. Probate can cause delays in settling an estate. Court and attorneys’ fees can consume up to five percent (5%) or more of the estate value.

Avoiding Living and Death Probate: Through a revocable living trust, living and death probate proceedings can be totally avoided. Specific instructions within this Trust can direct the Trustee as to how the assets should be managed if you become disabled or incompetent. Similarly, a “revocable living trust” enables your trustee to follow instructions as to how assets should be distributed upon death of the Trust Grantor. Assuming the assets are titled in the name of the Trust, the expense, delay, and lack of privacy caused by a death probate are avoided. For more information: Click on next section entitled “Trusts” for further understanding in this regard.