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Your estate comprises everything you own: from a piece of land to a house to your clothes and vehicles, your possessions, your bank accounts and investments, collectibles, furnishings, or any other assets that you have a controlling interest in. Your entire estate has an economic valuation, and you may decide how you want those assets handled upon your death through smart estate planning.
Why is the value of an estate important?
The value of your estate is basically relevant in two instances:
- When you need to file for bankruptcy
- When you die
Should you need to declare bankruptcy, it is necessary to assess your estate to determine whether you can reasonably be expected to pay any of your debts. The rigorous process that is involved in declaring bankruptcy is similar to that which takes place when someone dies.
What is estate planning?
Estate planning deals with managing the way you want your material possessions to be divided and passed on to your heirs upon your death. It should be the most important financial planning in your life. To carry out your expressed wishes, a will is drawn. In it, your intentions regarding the distribution of your estate are spelled out. Whoever is named in your will to receive an asset through inheritance is referred to as a beneficiary.
How are estates generally managed?
Most estates are divided among the loved ones of the person who dies. The point is to pass wealth from one generation to the next. Inheritance is so important in the United States that it basically accounts for a considerable portion of the total wealth in the country.
Hand in hand with estate planning goes the planning of the inheritance taxes that will have to be paid on the estate. Working with wills and estate planning attorneys, you can put in place several measures to minimize the amount of taxes that your beneficiaries will have to pay upon your death.
Why is having a will important?
By having a will, your heirs will have a legal document that spells out your wishes as to how you want your property divided and who will have custody of any minor children. In order for your wishes to be carried out as you envision, it is necessary for you to name an executor. The executor must be someone whom you trust fully to respect your wishes and make them come true.
What happens at your death?
After your death, it will be necessary for the court to authenticate your will through a process known as probate. Probate represents the first step in administering your estate and distributing your assets. The will is taken to probate court, where the executor is named. The court also gives the executor the legal powers they need to have in order to be able to act on your behalf and follow your stated wishes. The guys at WeBuyHousesJax can help if you want to learn more information when selling a house during probate.
Protect Your Estate the Right Way
You don’t need to be a multimillionaire to have a will drawn or to fully understand the law related to estate planning. Even if your assets are limited, you still want to decide how things are distributed and who gets what. And if your children are minors, it is urgent to put in writing what will happen to them should you die unexpectedly. Implement some smart estate planning right away.
