Many residents of Kennett Square, Pennsylvania, think that estate planning is only for the very wealthy but that is a misconception.. Any legacy may lead to a family fighting over the inheritance because of family dynamics or sentimental reasons that far outweigh the monetary value of the estate. While taxes may be a major consideration, there are many other issues that family members have been known to fight about as well.
When the deceased person leaves a will, it goes through probate, which may take a long time to settle. However, it is better for a person to leave a will than for the person's estate to be subject to state laws. If there is no valid will, an estate administrator will take over the responsibility of managing the estate, which can cost the estate a great deal, including court costs and transfer taxes. Leaving a will gives the estate owner and his or her survivors an advantage. First, the estate owner may not remember to assign all property or assets through a trust or other estate transfer method. In this instance, the will acts as a backup distribution plan. Second, the will can contain provisions and clauses that will clearly define the intent of the distribution of assets.
Among other things, the testator must also consider the liquidity of the estate. This means the cash availability of the properties to pay for taxes or debts associated with them. It's also important to consider the expenses incurred from the estate's management while it is under probate or a fiduciary's administration. Additionally, the clauses of the will should clearly designate how the taxes and debts of the estate will be paid.
There is no guarantee that the heirs will be satisfied by how a decedent's will distributes the property. However, the will is binding and neither the trustee nor the executor of the estate has the power to change it. To ensure that the transfer of property after death will minimize the possibility of probate litigation, a testator may wish to consult an estate planner and an attorney. Other tools for transferring the estate are available to ensure that administrators and executors abide by the testator's wishes while minimizing taxes and expenses.
Source: Investing Daily, "Reviewing the Estate Planning Basics," Bob Carlson, June 28, 2013