So you’ve heard that you need to put an estate plan in place, but you really don’t have a solid understanding of what estate planning is and why you need to do it. It can’t be that difficult for your heirs to fairly divide your property, can it? Sadly, it often is. There can be all kinds of emotions invested in property, and families often find themselves facing significant challenges when there’s no specific direction for the distribution of an estate
Essentially, the purpose of estate planning is to ensure the orderly distribution of your estate in accordance with your wishes. There are a number of different ways that you can pass your assets to family, friends or charitable institutions, is so desired, including the use of wills and trusts, the re-titling of assets, and lifetime gifting.
One of the first terms you’ll likely hear is “probate.” The probate process is a legal process whereby the court oversees the distribution of your estate. One of the common objectives of estate planning is to avoid the probate process. There are a couple of reasons for that. First, probate can be expensive—it’s not uncommon for the attorney who handles the estate to take up to 7% of the value of the estate as the fee for handling the probate process. In addition, the probate process can be time-consuming, meaning you won’t have access to property for months or even years.
One of the simplest ways to avoid probate is to re-title assets, such as a car, house or bank account. If you own property jointly with another person or persons, that property passes to them automatically upon your death, with no need for the probate court to get involved.
Another option for avoiding family conflict over your estate after your death—give away as much of it as you can while you are living. Currently, you can give away u p to $14,000 per person per year without incurring any gift tax.
Contact Our Office
At Barnard, Mezzanotte, Pinnie, Seelaus & Kraft LLP, we offer experienced and knowledgeable legal counsel to individuals in Pennsylvania. To set up an appointment for a free initial consultation, call us at 610-565-4055 or 302-594-4535 or contact us online.