A will is a basic legal document that is a starting point for any discussion of an estate plan. A will explains to the world, and a judge, what you planned to happen to your family and assets after you pass away. A will allows you to designate specific property to be given to (“bequeathed”) specific persons, to select a guardian for your children if the other parent has predeceased you, and to choose whom you want to receive your property.
A trust is another estate planning tool. A trust is more flexible than a will, because you can use it while you are still alive. A trust is a legal arrangement in which the “grantor” transfers property to the trust for the benefit of a person or persons. The grantor appoints a “trustee” to manage the property and assets in the trust. A trust may be designed to protect the assets from a young, immature beneficiary until that person grows up. By using a trust, one parent can provide support to his or her children, without giving control of the money to an ex-spouse or ex-partner after a divorce. Trusts may also be used to care for elderly parents or disabled children.
Other estate planning tools include life insurance. Term life insurance provides coverage for periods of time. Whole life insurance can provide coverage for the rest of one’s life. There are also IRAs, mutual funds and stocks that can provide money for survivors.
A lot of estate planning advertising talks about “avoiding probate.” Probate is procedure that takes place in court. There are procedures, set out in Nevada law, which survivors must use to have the decedent’s assets pass to survivors. There are planning techniques that can be used to avoid probate in the correct circumstances.
Estate taxes are taxes charged by the federal government, and some states, on the amount of money and other assets left behind by the deceased. Some estate planning techniques may allow a person to legally reduce the amount of taxes that will be owed by an estate.
Estate planning can help a person plan what happens to their family and assets while they are alive and after they pass away. If you are interested in estate planning, consult a professional for advice and guidance.