Once you’ve gained a property or several properties, the question regarding who will own these properties becomes ever more essential. It can be tough to determine this particular aspect of property ownership, but it’s an important aspect, nonetheless. However, aside from choosing who will inherit these properties, there are other problems you’ll have to consider, such as state laws. Understanding estate planning and inheritance laws are essential if you want to stake in the real estate market. We’ll start with the most essential of the two: estate planning.
What Is Estate Planning?
As stated earlier, estate planning is vital once you’ve gained a property. However, you can do this before you even own property. Estate planning is the process of creating management tasks for the properties you own once you have passed away. This includes managing the taxes for each estate and considering the people who will inherit these properties. It will also take into consideration the preservation of these properties and the extent they can be changed.
This process is mainly done with the presence of an estate-planning attorney. These kinds of attorneys will determine who should be there during the planning, the plans for improving your estate once you’ve passed away, and determining potential inheritors you have for each estate (if you have many).
Additionally, they can help interpret complicated state laws that might get in the way of your estate planning. They will do most of the job when it comes to estate planning. All you have to do is distinguish your goals for the future.
Estate planning includes all the properties you own, including assets such as cars, stocks, bonds, insurance, debt, and more. Technically, it includes everything you legally own by paper and which can be proven in court. The distribution and management of this estate primarily come down to the will and testament.
Will and Testament
An essential part of estate planning is writing your will and testament (will, for short). Your will has various purposes. However, its main purpose and the main reason why it’s so valuable is that it will determine how your estate and assets will be distributed once you have passed away. You can create trusts or a third party who will take care of your properties in part of your beneficiaries. This is helpful if your beneficiaries are too young to understand what it means to run an estate or if they aren’t willing to run your estate, but you still wish to give it to them.
The court tests the authenticity of a will through a process known as probate. This will determine whether the will aligns truthfully with your person and whether its conditions still hold the moment you pass away. This is why it’s important to update your will whenever you can.
Furthermore, trusts don’t necessarily go through these processes, making it more beneficial to have at least one if your beneficiaries aren’t ready to handle your estate. If you can’t secure a will the moment you pass away or if particular conditions cannot be completed in your will, the management and distribution of the estate will be determined by inheritance laws.
What Are Inheritance Laws?
Inheritance laws are the laws followed when it comes to the distribution and management of your estate if you can’t secure a will the moment you pass away. It’s also important to note that some states may take precedence over inheritance laws regardless of the existence of your will. These laws differ depending on your state, but two of the l esmost common are community property and common law.
Community Property
Community property laws are followed by Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. This law states that your spouse directly earns half your estate the moment of your passing. The remaining half goes to other beneficiaries. You can write a will with this law in mind. Without the presence of a will, the court will determine who will earn half of your properties depending on the given beneficiaries.
Common Law
The states not mentioned above more or less follow the common law when it comes to inheritance law. The common law does not give half of your properties to your living spouse, but they can file a claim for one-third of it. This particular law instead distributes your estate to beneficiaries who can purchase it through their income. Anyone who is already named the owner of a particular estate owns it regardless of the will and the law.
Here are the characteristics of estate planning and inheritance laws and why they are important for your estate. You must work on these things the moment you have earned a property or a significant estate. This will put your mind at ease alongside your beneficiaries.