What is Estate planning?
A person’s estate refers to all the property or assets owned by a person. These include real estate, cash, investments, vehicles, insurance, and any other individual belongings. What happens to An Estate after a person is deceased depends on whether that person has planned his estate or not. Soon in this article, you will learn about estate planning in land law.
Planning how your estate should go after your death is known as Estate planning. This is because you can decide how much of your estate, like properties, personal belongings, financial investments, assets, etc., will pass on. Not only that, but you can also decide the beneficiaries who’ll end up inheriting your estate after your demise.
In one lifetime, it is necessary to check this dynamic process at regular intervals to absorb any changes that may have occurred during your lifetime.
One can plan an Estate with the help of an attorney specializing in estate law and an experienced Estate planner.
Why Estate Planning with land law?
If you are wondering why one needs to plan his Estate, then
- To have control over what happens to your assets and belongings in case of your demise.
- Avoid the lengthy process of probate that may freeze or place your accounts under the court’s control during your life.
- To preserve your wealth and protect your assets.
- It helps to reduce taxes that a beneficiary may face.
- Estate planning ensures that no one fights over your assets after your demise. In simple terms, it helps in avoiding or reducing family conflicts.
- Estate planning reduces the legal expenses of the beneficiaries.
Main Estate planning documents
With these two primary legal documents, anyone can conduct Estate planning. The two legal documents are Wills and Trusts. Both these documents can specify how you want the distribution of your estate and personal belongings and to whom. Also, you can mention who you want to manage your estate and belongings till their distribution.
Both Trusts will serve the same purpose but have very distinct differences.
They are the legal documents that provide instructions on how to distribute the assets and estate of a person after their death. It will also include the information about the executor who’ll manage the assets until distribution and ensure proper distribution mentioned in the will. These usually go through the probate process and become public records. Wills, unlike trusts, do not offer protection against certain taxation.
They are the legal entity that will assume ownership of or own some assets after a certain triggering event. A trust involves information on how one handles and distributes the assets. There are two types of trusts based on when they take effect. If it’s effective when the grantor is living, then trust is called a living trust. When it takes effect after the death of a person, it is called a testamentary trust.
Trusts do not go through a probate process and thus remain private. However, trusts will protect certain taxations, litigation, or creditors.
Estate planning with land law
As mentioned above, two main documents for estate planning are wills and trusts. However, a revocable trust is preferred for Real Estate and land distribution to your beneficiaries. This is because when these properties or assets are distributed using a will, they will need to undergo the process of probate through your state’s probate court.
Also, some properties (land and real estate) may need to go through multiple probates according to the state’s laws. This makes the process lengthy and expensive with more legal costs such as court fees, attorney fees, and executor commissions. This probate process is public; thus, your creditors and excluded heirs are notified and can file a claim for their share.
Will does not control any jointly owned lands and properties. This type of estate planning method gives the court control over the process and timing of the distribution of assets to the beneficiaries. Therefore a revocable living trust is preferred for land or property distribution. This avoids probate at death and prevents the court’s control over the process. Not only that, trust keeps the process private. They protect your assets and are managed by the trustee you select until the assets are distributed.
After reading this article, you will know what Estate planning is, why one should plan his estate, and how estate planning works in land, Real estate distribution.