An estate is the total property—real and personal—owned by an individual prior to distribution through a trust, will, or inheritance laws. Real property refers to real estate and personal property refers to everything else, including cars and bank accounts. An estate includes both the individual's assets and liabilities.

Dying without a will or trust is called dying intestate. The intestate succession laws of your state determine how your property is passed on to your heirs. The state's formula may not mirror your preferred or intended asset distribution plan.

Careful estate planning can help preserve the greatest amount of wealth possible to pass on to one's heirs.

Wills and trusts are common ways of transferring an estate to one's beneficiaries. Typically, wills are best suited for small estates that are not subject to formal probate. Trusts are generally used for larger estates and those in which there would be significant death taxation liabilities.

A trust is a private agreement which creates a legal contract between two parties—the grantor (estate owner) and the trustee (legal administrator) for the benefit of a third party—the beneficiary. Trusts can perform a multitude of functions including the avoidance of probate, the reduction or elimination of taxation upon the death of the estate owner, and the scheduled or controlled transfer of the estate to the intended heirs.

Estate planning may also be used to effectively manage your assets while you're alive. Well constructed plans include strategies for income generation throughout your lifetime, protecting your investment real estate, using life insurance to your advantage, and protecting your loved ones against divorce, creditors, and lawsuits.

Estate planning is an art that takes into account complexities and changes in tax laws in addition to non-tax objectives. It's important to work with estate planners who will continually review and adjust your plan to derive maximum tax benefits and explore emerging opportunities.

Contact Private Equity Group to make sure your estate plan encompasses a comprehensive wealth protection plan that addresses your individual needs and goals.

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