Three Estate Planning Scenarios You Need To Think About

Preparing your estate for your eventual passing is a task that calls for a fair amount of planning. There is a wide range of issues to address, from tax liabilities to potential disputes among family members. With the guidance of an estate planning lawyer, you can tackle the following three scenarios that may come up.

Paying the Tax Man

When transferring your legacy, whether to descendants or charities, you'll want as much money and property to be put in their possession as possible. One way that people tend to mess this job up is by not sufficiently funding an estate in order to pay down taxes. An inheritance can quickly go from a blessing to a white elephant gift if the folks receiving it can't pay the tax bill.

A common way that estate planning firms address this challenge is by using charitable donations as tax write-downs. The classic approach is to grant an artwork to a museum or a foundation, usually with certain conditions. A valuation will have to be attached to the art, and then the valuation of the charitable donation will be used to get the tax bill for the estate down.

Naming and Locating Beneficiaries

In the modern world, families often drift apart, both emotionally and geographically. Once you've named the beneficiaries of your estate, they'll also need to be located. Providing your estate planning lawyer and the executor with any contact information you might have will provide them with a starting point. It's also a good idea to allocate money in order to deal with the expenses that'll likely come up in tracking down beneficiaries.

Assigning Responsibilities

While it is possible to have your estate planning lawyer act as the executor of your estate, most people break up those responsibilities. In some jurisdictions, having your attorney serve in the executor role won't be allowed. Regardless, it's a good idea to break up the fiduciary responsibility of the executor and the legal-interpretative role of your attorney. An especially large estate may call for multiple executors or support staff to be assigned to an executor. If you're worried that your estate may be too large for a single person to administer, it's a good idea to explicitly state that staff can be added and to authorize funding.

Notably, there may be money left over when everything is parsed out. Empower the executor to disburse the remainder of the funds.