You may hear the term “estate planning in Indiana” and wonder what it is. We would like to provide an explanation here.
At any given time you’re going to be in possession of financial assets and other types of property. What would happen to these possessions if you were to pass away?
Estate Planning in Indiana
Things that you owned while you were living comprise your estate after you pass away. Estate planning involves making preparations for the distribution of these assets.
If you do nothing you will die intestate. The estate would be passed along via the utilization of intestate succession rules if you died without a will. The outcome may not be what you would have wanted. This is why estate planning is important.
Many people automatically assume that they should have a last will drawn up when they decide to put an estate plan in place. There is nothing inherently wrong with this course of action, and it is certainly much better than nothing.
However, you do have other options, and you should be aware of them. Many people don’t know that the heirs to an estate will not receive their inheritances until the estate has been probated when a last will is used to pass along personal property.
Probate comes along with some pitfalls. For one thing, there are expenses that can pile up during this process and every penny that is spent during probate is a penny that could have gone to the heirs. In addition to this, probate can take months at minimum and sometimes it can take multiple years.
The inheritances will not be distributed while the estate is being probated.
There are various different ways that you can arrange for asset transfers outside of the probate process. One very popular probate avoidance tool is the revocable living trust.
Some people of relatively ordinary means hear the word “trust” and they tune out because they assume that trusts are only for wealthy people. However, in truth revocable living trusts can be useful for people who are by no means rich.
In fact, very wealthy people have estate tax concerns, and revocable living trusts do nothing to mitigate estate tax exposure. These trusts are for the most part used to enable asset transfers to the beneficiaries outside of the costly and time-consuming process of probate.
Arranging for your family members to receive their inheritances is certainly at the core of estate planning. However, estate planning can also include an incapacity component.
Who would handle your medical and financial decisions if you were to become incapacitated late in your life? You can answer this question yourself but executing durable powers of attorney. With these documents you empower agents to make decisions in your behalf should you become unable to make them for yourself.