Say the words “estate planning,” and some people may immediately think the procedure is only for the ultra wealthy. However, the reality is, anyone who owns a home, car, and other valuables has an estate. Knowing what to do with these possessions should something happen to the owner requires customized guidance. Here is a helpful guide on estate and trust documents.

4 Key Estate Planning Documents

1. Trusts

If a person owns property, a trust details who will receive ownership after they die. The beneficiaries can be a family member or other designated individual. Depending on the complexity of the real estate, a corporate trustee may be assigned to oversee the property’s assets. The two most common types of trusts are testamentary and living. A living trust is active while the person is still alive. A testamentary trust goes into effect after a person dies.

2. Wills

A will lists a person’s specific plans on how to manage their property and assets after passing away. It is considered among the most important documents in estate and trust planning. The contents of a will can vary with the person’s wishes. However, the document typically contains detailed instructions on property distribution among beneficiaries and division of assets. An executor is named to share the will’s content with the individuals involved.

3. Death Taxes

Another key aspect of estate and trust planning deals with whether taxes will be assessed after a person dies. Some considerations are whether the surviving spouse will be responsible for paying estate taxes. In some states, designated beneficiaries may be exempt. The rules vary in each state and typically require the expertise of a CPA that specializes in tax issues.

4. Gift Taxes

A person can provide gifts valued at a certain dollar amount without having to pay taxes on them. The amounts vary with each tax year and are generally adjusted based on current inflation rates. Gift recipients can be a spouse, child, grandchild or a non-relative. To ensure state and federal gift tax rules are being followed, a professional tax consultant can help navigate the process.

When it comes to estate planning, you want to make sure you have a solid roadmap for your heirs. Since 1992, the office of Dianne M. Saunders, CPA in Litchfield, CT has helped individuals from diverse backgrounds create customized estates and trusts. She understands that no two clients are alike and will prepare documents unique to their financial situations. To get started on preparing a plan for your estate, call (860) 567-3022 to schedule a consultation. Visit the website for information on the agency’s complete suite of services, including tax return preparation and bookkeeping.