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As an executor, you have a long list of duties and a fiduciary obligation to act in the best interest of the estate and its heirs. You also have anxious beneficiaries who already are dealing with grief. One of your many tasks is to keep beneficiaries informed of the progress in settling the estate's affairs.
A will is an important way to distribute your assets, financial and otherwise. One major limitation of a will is that you have to die before it can become effective; in other words, if you're incapacitated, a will has no legal effect, so any health care proxies or durable powers of attorney you might have will guide any decisions made on your behalf. This could create problems if you need to complete financial transactions with outside parties who have trouble accepting or even refuse to accept a power of attorney.
In legal terms, probate is the general administration of your estate — with or without a will. Your will should contain the name of your executor. If it doesn’t, then an administrator will need to carry out the probate process instead. This might result in your assets being used to pay the liabilities for your estate before anything remaining can be distributed to your and distribute your assets to beneficiaries.
Are you receiving bill after bill following the death of your loved one? If so, it’s important that you understand the rules of posthumous bills as well as your rights when it comes to paying your deceased relative’s debts.
It is somewhat unusual to highlight 2026 taxes in 2024, but we are in an unusual situation: Many of the provisions in 2017's Tax Cuts and Jobs Act will expire at the end of 2025 unless Congress acts to extend them. Taxpayers need to be aware of how they will be affected so they can be prepared, especially when it comes to estate and gift taxes.
When it comes to estate planning, one of the most important factors to keep in mind is that trusts are formed in accordance to state, not federal, law. When establishing the terms of your estate plan, you might consider using a trust to pass assets along to your beneficiaries or transfer wealth to your loved ones. Establishing a trust is often a wise strategic decision, but at the same time, grantors should fully understand that income received via a trust is considered taxable income by the IRS.
When the Titanic went down in 1912, several women chose to remain on board and drown with their husbands; most famously was Ida Straus, whose family co-owned Macy's Department Store. Although Titanic-scale disasters are extraordinarily rare, you should nevertheless include a contingency beneficiary in your will or trust in case life or death throws you a curveball.
If you are the recipient of an inheritance, you might be wondering what the tax treatment of the assets should be. Ultimately, when you inherit stocks in the form of a taxable brokerage account, you will typically receive a stepped-up cost basis. This is a factor that increases the value of the asset for tax purposes according to the market value at the time the person who named you a beneficiary dies.
Probate is an experience many people go through. However, you'd be surprised how few people know what probate is until they enter the process themselves.
Trusts are legal arrangements that ensure the administration of a deceased person's assets align with what they would have wanted. Additionally, trusts work on behalf of your beneficiaries in your absence.
If you have an IRA, you are required to take out a certain amount of money each year once you reach age 73, even if you don't need the funds. This is known as a required minimum distribution and it can increase your taxable income, potentially pushing you into a higher tax bracket.
The step-up tax adjustment has been under siege for decades but has so far survived the onslaughts. The provision, which reduces capital gains tax for estates, has been controversial since the 1970s. Policymakers would still love to get their hands on the bonanza in tax revenues it represents.
For all intents and purposes, a trust is considered its own entity. Trusts are legal documents, but they are also taxed separately from those to whom the assets within a trust will be distributed.
Unlike a unilateral will, a prenup is a bilateral agreement crafted between two people. Ideally, a prenup will be drafted in alignment with the corresponding will. However, in situations in which the two documents are in direct contradiction with one another, courts tend to prioritize the prenup over the will as long as the former document was negotiated fairly between the two involved parties.
Trusts are used in estate planning to transfer assets to beneficiaries. Trusts have some advantages over wills, including skipping probate. That's pretty basic. But it gets complicated when you try to figure out which type is right for you. Know the options available to help you make an informed decision.
When you write a will, one of your most important decisions will be whom to appoint as the executor, responsible for carrying out the terms of the document. It is not a casual choice. Executors play a crucial role in ensuring your wishes are implemented faithfully and efficiently.
While Britney Spears' conservatorship case and her multimillion-dollar fortune were extraordinary circumstances, her legal condition is not uncommon: Over 1.3 million U.S. adults are living under guardians or conservators, who control about $50 billion of their assets, according to the National Center for State Courts.
If you think you may face a gift tax issue, you may want a qualified personal residence trust—a type of irrevocable trust that can remove a house from an estate to reduce gift taxes when transferring it. Here's how it works: The taxable portion of your house is considered a future interest gift, but you can minimize it by using the estate and gift exemption.
For some simple estates, all you may need to do is split your assets in equal proportions among heirs. In other instances, however, you have more complex issues to confront: How can you apportion a family business, especially one to which all beneficiaries do not contribute the same sweat equity? How should you approach real estate, such as a house or vacation home? How can you achieve the most tax-efficient division of your property?
If you dither and procrastinate over creating even a straightforward will or simple trust, you put the future finances of your family and loved ones in jeopardy. You risk that the assets you have worked for a lifetime to accumulate or protect will not be distributed as you would wish.
We like to imagine that a death brings families together in grief, but that's not always the case. Sometimes, the daughter of the deceased will announce that her mother had promised her the picture that always hung on the living room wall, but then the son pipes up that the picture was promised to him. Both have memories and emotions associated with the picture, so the fight can get acrimonious fast, potentially leading to a split family in which siblings aren't communicating. The purpose of a well-drafted will is to give clarity to your wishes to make sure this doesn't happen to your family.
When you use a trust, you bypass probate, a lengthy legal process that validates your will, and you leave precise, legally binding instructions for how to distribute and potentially maintain your assets. Have a beneficiary with special needs who's ill equipped to manage the inheritance? Bequeathing complex assets that require ongoing attention after you're gone? A trust can help.
Back in 1913, Woodrow Wilson began his first term as president, and Americans first filed Form 1040s. Right from the beginning, Congress told the IRS to enforce rigid rules for compensation and to forget about gifts. The IRS followed orders.
When you're making your estate plan, you can choose between many types of trusts. But whichever kind you choose, you'll have to select a trustee to oversee your and your loved ones' assets. Understandably, this important decision may give you pause. You need someone who will act in your heirs’ best interests.
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