It is easy for an individual to end up overwhelmed by the options available while estate planning and also all of the steps involved in crafting an estate plan from scratch. From the numerous documents to the various issues that could compromise their validity, there’s enough to stress any potential testator.
There are some tips that can help to set people up for success when estate planning. Being careful about the means one uses to transfer property, thinking about Medicaid eligibility and creating living documents in addition to testamentary documents are all excellent estate planning tips. Here are a few other good moves for those planning their estates to consider.
1. Consider tax liability and debts
Some people don’t realize that their family members won’t receive an inheritance until the executor of their estate pays off their debts and any taxes that are still due. In addition to income taxes for the deceased individual and the estate itself, there could also be estate taxes due if a person dies with millions of dollars in property in their own name.
Quantifying the debt someone has and evaluating what taxes may apply can help people minimize how much goes to creditors and the government while maximizing what their loved ones receive.
2. Take steps to prevent probate conflict
Whenever someone tries to leave valuable property for the people they love, there will inevitably be some people unhappy with their decisions. Those who feel like an estate plan is unfair are more likely to try to challenge it in probate court.
Michigan adults can protect their legacy from frivolous litigation by including a no-contest clause or penalty clause to disinherit those who bring an unnecessary will contest. Talking about intentions with family members can also be a very smart decision.
3. Name the right executor and an alternate choice
Many parents choose one of their children to serve as their estate executor, failing to consider how there might be a conflict of interest in such an arrangement. When someone is also a beneficiary of an estate, they may not be as transparent or fair about the process of estate administration.
Choosing someone who doesn’t have much interest in the estate and whose personal relationships won’t compromise how they handle the probate process is typically a smart choice for a testator. Many people will also choose an alternate candidate in the event that the person they name becomes unavailable.
Following thoughtful tips and also seeking professional legal help can help to make it much easier for adults in West Michigan to create a meaningful estate plan.