Probate is the legal process that wraps up a person’s legal and financial affairs after their death.
AARP reports that Americans lose $2 billion dollars a year to probate, and while no estate strategy can completely eliminate the risk of an extensive probate, managing the probate process may be possible with a valid will and assets that avoid probate.
- Some assets that avoid probate include:
- Property held ina trust
- Property given away before you die
- Jointly held property that isn’t common property
- Assets in a pay-on-death account
- Death benefits from insurance policies
- Retirement accounts with a named benficiary
These aren’t to do with what happens after you die, but what to do before you die.
Living wills outline very clear instructions on how to handle difficult decisions of life and death, if you’re not able to make them. Nearly two-thirds of Americans don’t have aliving will, bit the American College of Emergency Physicians urges every adult of every age to have one.
Tax Exemption Strategies
Only 2 out of every 1,000 estate will exceed the exemption.
Potentially hundreds of thousands of additional American households can take advantage of these strategies, passing on or all of their assets free of estate taxes.
Created and funded while you are alive, Living Trusts are composed of assets you choose to put into them.
Managed by a trustee (usually you), the assets are structured to pass to a beneficiary, or benificiaries, automatically upon your death, much like a will.
Power of Attorney
A written authorization empowering a person to execute personal and legal matters on your behalf.
A good strategy may be to pick a person who either has some expeirence in these fields or has the necessary qualities to handle these decisions. This is often to a spouse or adult child. A duable Power of Attorney allows that person to act on your behalf even if you’re incapacitated or otherwise unable to make decisions.