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Estate planning is a very important process for almost everyone. Although it may be difficult to consider what will happen to your family after you pass, by creating an estate plan, you can protect your assets and your loved ones long after you are gone.
Although the process is important, estate planning is a complicated aspect of the legal system. To properly create an estate plan, you must understand the restrictions and benefits of its different options. The best course of action is to hire a qualified attorney to support you throughout the estate planning process. This ensures that everything is done correctly and will have the maximum positive impact on your loved ones.
What many people do not realize is that the legal system does not consider certain assets to be part of a person’s estate. By understanding this, you can create an estate plan that accounts for all applicable assets while making other arrangements for those that do not qualify.
Our attorneys at Ken R. Ashworth & Associates are experts in this area and can answer any questions you may have during the estate planning process. We offer industry-leading legal support for individuals and families looking to create a reliable and effective estate plan.
Retirement accounts make up the main category of assets that do not fit into an estate designation. When a person holds these specific accounts, they must make alternative arrangements for them to ensure that they go to the correct person. An estate plan will not account for:
When you create these accounts, you often must choose a beneficiary for the funds in the event of your death. This is to ensure that the assets go to the correct person, even though they are not included in your estate plan.
Savings accounts are unique. In many cases, you can name a beneficiary for your savings account, or if the account is a joint one, the funds will go to the other individual. However, if you do not name a beneficiary for your savings account, the funds become part of your estate.
One major reason to understand which assets are considered part of an estate is that estate assets often must go through probate. Although a trust or other arrangements can help to minimize the assets that go through the probate process, you may not be able to avoid the probate process completely.
During probate, the court assesses a deceased individual’s applicable assets and settles any government debts, such as taxes and fees. During this time, the court also reads the will to ensure that it is legal and binding. After this process is finished, the assets are released to the executor of the estate, who can distribute them to the beneficiaries.
The assets that are not considered part of an estate do not go through this probate process and therefore are not subject to taxation or debt repayment. However, special arrangements must be made outside of the estate plan to ensure that these assets go to the correct beneficiaries.
There are significant benefits to holding assets outside of your estate. Primarily, your assets will remain with your family rather than being subjected to court and government taxes.
A: The law does not consider retirement accounts such as 401(k)s, pensions, trusts, and savings bonds to be part of a person’s estate. These accounts usually have separate designations outside of an estate and go to beneficiaries that the benefactor has selected within these designations. It is important to have a plan in place for these accounts to ensure that the proper beneficiaries receive them after your death. A will cannot control these accounts.
A: A person’s estate consists of many assets. Your estate plan will affect assets such as:
The law does not consider retirement accounts to be included in a person’s estate. Items within an estate are subject to probate unless they exist within a trust. An estate planning attorney can help you determine the best plan for your estate and assets.
A: Yes, cash is part of your estate and subject to probate, federal, and state taxation. The exception to this is if the cash is in an account and you name a transfer on death (TOD) beneficiary for your checking and savings accounts. If you have a TOD, the beneficiary receives the money immediately when you pass, and no taxes can be levied against them.
A: No, most retirement accounts are not considered part of a person’s estate. If you have a pension, savings bonds, IRAs, a 401(k), or other similar accounts, they should remain separate from your estate and avoid probate court. Many of these accounts require you to name a beneficiary, which means that the beneficiaries that you outline in your will or estate documents do not apply.
Our attorneys at Ken R. Ashworth & Associates have been practicing estate law in the Las Vegas area for many years. We have a thorough understanding of the state and federal laws and regulations that may affect your assets when you pass. With our help, you can create an estate plan that uses the laws to your advantage and benefits your loved ones when you pass. You can feel secure knowing that your hard-earned assets have been properly protected and will go to your beneficiaries quickly and efficiently.
No matter what your situation may be, our team is here to help you create an estate plan that is right for you. For more information about our services, or to begin the estate planning process, please contact Ken R. Ashworth & Associates online today.