Estate planning

Estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life and at and after death, while minimizing gift, estate, generation skipping transfer, and income tax. Estate planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can be determined by the specific goals of the client, and may be as simple or complex as the client's needs dictate. Guardians are often designated for minor children and beneficiaries in incapacity.

The law of estate planning overlaps to some degree with elder law, which additionally includes other provisions such as long-term care.

Countries whose legal systems evolved from the British common law system, like the United States, typically use the probate system for distributing property at death. Probate is a process where 1) the decedent's purported will, if any, is entered in court, 2) after hearing evidence from the representative of the estate, the court decides if the will is valid, 3) a personal representative is appointed by the court as a fiduciary to gather and take control of the estate's assets, 4) known and unknown creditors are notified (through direct notice or publication in the media) to file any claims against the estate, 5) claims are paid out (if funds remain) in the order or priority governed by state statute, 6) remaining funds are distributed to beneficiaries named in the will, or heirs (next-of-kin) if there is no will, and 7) the probate judge closes out the estate.

Estate planning involves the will, trusts, beneficiary designations, powers of appointment, property ownership (joint tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gift, and powers of attorney, specifically the durable financial power of attorney and the durable medical power of attorney. After widespread litigation and media coverage surrounding the Terri Schiavo case, estate planning attorneys now often advise clients to also create a living will. Specific final arrangements, such as whether to be buried or cremated, are also often part of the documents. More sophisticated estate plans may even cover deferring or decreasing estate taxes or winding up a business.

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Wikipedia