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| Why is estate planning so important? |
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| Estate planning is a critical part of your overall financial plan because your obligations to your family do not stop when you die. You may die while you are still providing for a minor child or you may die with a large amount of assets and/or debts. If you do not make certain decisions about how you want your affairs settled the courts will make them for you after you have died. And, they may very well differ from the decisions you would have made. For more information, click here.
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| What is my “Estate”? |
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| The assets and debts that you leave behind are collectively called your Estate. The value of your Estate is calculated on the date of your death (or in some cases, six months later). Your Estate includes the fair market value of all assets you own outright and one-half of the value of property owned jointly with your spouse. Other property jointly owned with individuals other than your spouse is included in your Estate at either full value (if your original contribution cannot be proven) or at your share of the value (if your contribution can be proven). For more information, click here.
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| What are “Estate Taxes”? |
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| When you die, and if you leave an Estate valued over a certain dollar amount, your Estate is obligated to pay a certain percentage of its value to the government. This payment is known as an Estate Tax and is used by the government to help finance the running of the government. For more information on Estate Taxes and tax rates, click here.
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| What is a “Will”? |
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| A Will clearly outlines your wishes as to the distribution of your assets when you die. If you die leaving behind dependent minor children, it names Guardians for your children. It also appoints an Executor who is responsible for executing the Will according to your instructions. For more information about Wills and how often you should review and update your Will, click here.
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| What is an “Executor” and how should I choose one? |
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| An Executor is the person who you appointed in your Will with the responsibility of carrying out the terms of your Will, usually with the assistance of an accountant and/or an attorney. An Executor usually serves for approximately one year or until the Estate is settled. You should choose someone who you believe will respect your wishes with respect to executing your Will. For more detailed information on an Executors responsibilities, click here.
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| What is a “Guardian” and how should I choose one? |
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| A Guardian has legal responsibility for taking care of your minor (age 18-21 depending on the state) or incompetent children if neither you nor your spouse is living. You will need to select one or more people to serve in this role. Always talk to the people you choose before selecting them in order to gauge their willingness to serve. For more information on choosing a Guardian, click here.
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| What is a “Trust”? |
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| A Trust is a separate legal entity that is considered equally separate and apart from the individual establishing it. Under a Trust, one person, called the trustee, holds legal ownership of property for another person, called the beneficiary. The trustee is responsible for managing the property for the beneficiary and distributing income and principal under the terms of the trust instrument. For more information on the possible benefits of establishing a trust, click here.
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| What is the “Probate” process when someone dies? |
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| Probate is the process of reviewing your Will and Estate by the court. The court reviews the Will to ensure authenticity and consistency with state law. The court also makes sure debts are settled and taxes are paid. Once the Will is validated and all claims paid, the executor can pay out the balance of the Estate to the beneficiaries. For more information on the probate process, click here.
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