Estate planning is one of the most important steps you can take to ensure your property and health care wishes are honored. A complete estate plan can resolve most legal questions that tend to crop up after death.
Creating a will
If you don’t have a will, that is called dying intestate. Your estate will be taxed at the maximum, and someone else will make the important decisions. A will clarifies who shall inherit your property and who shall be the guardian for the children should you and the other parent die. In Connecticut if you don’t have surviving relatives, the state receives the estate.
A will should specify:
- Your desired property distribution, including gifts to family, trusts and charitable donations
- Provisions for your children and even pets
- Your chosen executor or executrix (who will manage your affairs)
Tips for avoiding probate
Probate is a court-supervised process after death. Its purpose is to authenticate the will, appoint an executor, inventory property, settle debts, locate heirs and distribute the property according to the will or, if there is no will, according to state law.
Formal probate consumes time and money and is best avoided when possible. Most states now offer simplified probate procedures for low value estates. It is unlikely that you can avoid probate entirely, but many assets can be transferred outside of probate. Examples include:
- Living trusts provide tax benefits to the trust beneficiaries, avoiding taxation on the estate of a beneficiary. Trusts don’t go into probate and creditors cannot access it.
- Property transfers to the surviving owner of real estate, bank accounts, vehicle, brokerage account, and individual stocks and bonds, will avoid probate through joint ownership.
- Payable upon death beneficiary bank accounts and CDs are simple ways to avoid probate. Transfer upon death registrations and deeds like cars and real estate are similar probate avoiders.
- Limit the tax burden by transferring assets while alive, through an inter vivos gift. If you do not own it, it cannot be taxed.
In some states, very small estates can be distributed without probate. Under Connecticut statute Sec. 45a-273, where an estate is valued at no more than $40,000, you may skip probate and file an affidavit of small estate with the probate court.
Other services for Legal Estate Planning include Financial Power of Attorney, End of Life Choices and Financial Arragements and more, please contact Tony today to discuss you Estate Planning needs.
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- (203) 520 - 6363
- tnunes@fssplaw.com
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