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Estate complexities and how to deal with them

Most Texans will understand the important of formulating an estate plan, but not have an in-depth knowledge of why it is important or what factors will come into play. Similarly, there are certain issues that will have an influence on an estate plan and must be fully understood by the testator and the people who will be receiving the assets and properties. Understanding probate issues, factors of ownership and tax responsibilities are key factors to grasp.

Probate is when the validity of a will is established. This allows an executor to move forward with collecting and paying debts, dealing with taxes, selling property, overseeing distribution of assets, and doing all the small and large things that go along with overseeing an estate. This can be a long process and can be contentious if the will is contested. Regardless, the probate can take a percentage of the assets of the estate. Preparing for this is key.

Depending on the size of the estate, it might be useful to bear certain informal procedures in mind as they can avoid court intervention. Larger estates generally need to have court supervision. Certain aspects of the estate will not have to be subject to probate. Included are life insurance, property in trusts, and jointly held assets like a home or bank account. Joint ownership means that two people might have owned the property together. This is often used by married couples with the property moving from one to the other at the time of death.

While taxes are a common concern among people navigating the estate of a deceased loved one, the federal estate tax in its current form is generally relegated to larger amounts - above $5.49 million for an individual and double that for couples. There are strategies to avoid this such as charitable contributions. People who are planning for the future must keep these issues and others in mind when they are deciding on how best to structure a plan and address estate administration. A lawyer who is experienced and knowledgeable with probate issues, estate complexities and everything that goes along with it can help to prepare for the future.

Source: Kiplinger.com, "Forces That Affect Your Estate Plan," accessed on April 4, 2017

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