Estates, Wills, and Tax Law
You may give little thought to the effects of your death as you are so engrossed in the concerns of daily living. While you may have realized the importance of a life insurance policy for protecting your dependents in the event of your untimely death, you may have overlooked the necessity of providing a valid will to govern the distribution of your estate, or of establishing an appropriate trust on your estate to minimize taxes that your legal heirs/beneficiaries may have to pay upon the transfer of the property's title to them. It is important to realize that procrastination on this matter can have financially devastating consequences on your loved ones.
While you may still be young and fit, accidents do happen and fatal health disorders are not a monopoly of the elderly. You would want to transfer accumulated assets such as real estate, cash, business ownerships, life insurance, 401(k) plans, IRAs, Social Security, and other employment and government benefit plans, to your heirs or some charitable institutions after death.
The total value of items that make up your estate may be considerable and could be substantially bigger than you initially estimated. For example, homes and other real estate (even encumbered property) will appreciate in value, pension plans can return sizable amounts at maturity, and the benefits paid from life insurance policies may increase the value of your estate significantly.
You can significantly reduce the amount of your estate taxes by drafting a valid will. With a valid will, you can be sure that your estate will be directed to the right person in accordance to the proportion that you wish; an added benefit is that it can prevent family quarrels and avoid unnecessary expenses. You may want to engage an attorney to help you arrange your estate while taking into account laws on wills, estates, trusts and taxes. A good attorney can help you derive maximum financial benefit available from all these laws when the time comes for disposition of your estate and property after death.