By TheLaw.TV
It is often said that the only guarantees in life are death and taxes. With the help of a good probate and estate planning lawyer, however, it may be possible, at least, to avoid paying taxes on your death. Probate and estate planning lawyers have a variety of planning tools at their disposal and a basic familiarity with these devices can help individuals plan for medical care, end of life decisions, protect and distribute assets, and save money on unnecessary taxes.
The most basic estate planning is a will. A will is a legal instrument or codicil where a person distributes his or her property (real and personal), that takes effect after his or her death. It may be amended or revoked during the testator's lifetime. If a person fails to create a will, or dies without a valid will, the laws of intestacy of the state where the person lived control who and how much individuals receive of the testator's estate. The exact requirements for a will varies by state, but typically involves that the person crafting the will be of the age of majority and of sound mind, that there be witnesses to the will who are not named beneficiaries, and it must be properly executed. Some states allow handwritten or even oral wills, whereas other states prohibit or, more to the point, do not recognize such wills. Further some states regulate who must be included in a will (e.g., a spouse or minor children).
The process of taking the assets from the decedent's ownership and transferring to his or her heirs is called "probate." Probate can take many months or longer, and add unnecessary expenses to a family. One method for avoiding probate involves the creation of "trusts." Trusts are legal creations that own assets for the benefit of another; thus a trust can own property or personal assets for the benefit of you, your spouse, your children, or even a charity. When individuals create a trust, they can then "fund" the trust – or place assets in the name of the trust, and thus when one dies, those assets remain in the trust and do not have to go through probate. If the trust was established for the benefit of the children, they still benefit from the trust after the death of trust creator. Trusts may be revocable or irrevocable, and some states allow for credit shelter trusts, generation-skipping trusts, personal residence trusts, life insurance trusts, or qualified terminable interest property trusts. Because the trust owns the assets, the value of these assets is typically not counted in the value of an estate – and thus any taxes due based on the size of the estate may be substantially reduced or avoided altogether.
Estate planning lawyers can also assist individuals with smart financial moves and honoring their client's wishes during their lifetime as well. This may involve asset protection, like insurance, business formation, prenuptial agreements, homestead exemptions, and nursing home planning. It may also involve advance healthcare directives, power of attorney, health care proxies, do not resuscitate (DNR) orders, living wills, and conservatorships.
Source: http://thelaw.tv/news/2012/08/11/probate-and-estate-planning/