Estate planning is the process of anticipating and arranging for the disposal of an estate during a person's life. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity.
It overlaps to some degree with elder law, which additionally includes other provisions such as long-term care.
What is an estate?
An estate is a legal entity created as the result of a person’s death. The decedent’s estate is a separate legal entity for federal tax purposes.
An estate consists of real and/or personal property of the deceased person. The estate pays any debts owed by the decedent and then distributes the balance of the estate’s assets to the beneficiaries of the estate.
The estate exists until the final distribution of the assets is made to the heirs and other beneficiaries.
- Bogleheads® forum topic: - A comprehensive list of essential information to help survivors manage the estate settlement process.
- Bogleheads® forum topic: - Guidance for loved ones upon a person's death. The letter provides locations of important documents and brief instructions.
- Bogleheads® forum topic: - Additional helpful information for survivors to manage the estate settlement process. A number of practical suggestions; such as dealing with banks, insurance companies, and utilities are discussed.
- Bogleheads® forum topic: , LadyGeek. January 23, 2020. The estate planning process may include funeral arrangements. Insurance can hedge against unanticipated price increases.
- Bogleheads® forum topic: , metalworking. Feb 01, 2020. TOD (Transfer On Death) and TOD (Payable On death) accounts are excluded from probate, but remain part of the estate. In some situations, the beneficiary may be required to return funds in order to pay an estate's expenses.
Introductory materials on estate planning
- An Estate Planning Checklist, Christine Benz, Morningstar, July 27, 2017.
- Estate Planning Checklist, Charles Schwab, viewed July 28, 2017. A comprehensive checklist including free PDF downloads of an asset inventory worksheet and an estate planning guide of essential information.
- Vanguard Estate Planning FAQ
- Vanguard Trust Services
The Internal Revenue Service has a great deal to say about the transfer of assets:
- Frequently Asked Questions on Estate Taxes
- Pub 950, Introduction to Estate and Gift Taxes, has been moved into Publication 559 (link to notice)
- Pub 559: Survivors, Executors, and Administrators
- Estate and Gift Taxes, from the IRS (general overview)
- Forms and Publications - Estate and Gift Tax, from the IRS