Estate planning is specifying what will happen to your estate after you pass away. Estate planning is not just for rich people.
If you want to make sure your kids from your first marriage receive a part of your estate, even if you are remarried, then you are doing estate planning.
If you want to make sure your unmarried partner receives a part of your estate, then you are doing estate planning.
If you want to provide for a handicapped child, but want to make sure they don’t lose their benefits, you are doing estate planning.
If you want to make sure your dogs are taken care of after you pass, then you are doing estate planning.
If you want to pick the person who will make health care decisions for you, then you are doing estate planning.
What is Estate Planning?
When people think of estate planning, they usually think of a will or a trust, or avoiding probate. While those can all be a part of an estate plan, estate planning involves more than that.
A good estate plan will answer the following questions:
- What will happen to my property when I die?
- How will my property be transferred to my heirs?
- Who will take care of my children if I die?
- Who will make health care decisions for me if I no longer can?
- Who will take care of my finances when I can no longer do it?
- What will happen to my remains?
What will happen to my property when I die?
This is probably the most important question that an estate plan answers. It is the question that your loved ones will want answered shortly after you die.
What will happen to my property if I do not have an estate plan?
If you do not make an estate plan of your own, then the State of Wyoming has one for you. The State’s plan is called Intestate Succession.
Intestate succession generally provides that if you are married, your property will go to your husband or wife, and to your children if you have any. The proportions differ, depending on whether those children are yours alone, or yours and your spouses together.
If you are unmarried, then your property goes to your children, if you have any.
If you are unmarried and have no children, then your property will generally go to your parents and brothers and sisters, or perhaps their children.
Intestate succession works fairly well for “standard” situations, that used to be the norm in the previous centuries. However, with today’s blended families and non-traditional relationships, you may want to distribute your property differently.
How do I control what happens to my property when I die?
There are many ways to control what happens to your property after your death, and they are all part of your own estate plan.
Beneficiary Designations
You can (and often should) use beneficiary designations as part of your estate plan. Most financial accounts allow you to designate a beneficiary or beneficiaries.
When you have a designated beneficiary, then that person, or persons, will receive the funds in the account when you die. Generally, the beneficiary just provides the financial institution with a copy of your death certificate, fills out some forms, and then they get the money.
Beneficiary designations are available for:
- Checking accounts
- Savings accounts
- Certificates of deposits
- IRA’s
- 401k’s and other such plans
- Investment accounts
- Etc.
Beneficiary designations are a great tool if you want certain accounts to go to certain people. They also avoid probate of that account. However, you can also designate your estate as a beneficiary, if you want a particular account to be added to your whole estate, to be distributed according to your estate plan.
Joint Ownership
You can also control who gets your property after you die by making them joint owners during your lifetime. This method can be used with some financial accounts. However, joint ownership is a more common estate planning tool for titled property, such as cars, boats, mobile homes, campers, and other “vehicles.” You can also use joint ownership to control who gets your land or real estate.
Joint ownership of financial accounts
Many people put one of their kids on their accounts when they start needing help paying bills, etc. When you make another person a co-owner of the account, then they actually own the account, and they will get whatever is in the account at the time of your death.
One of the estate planning benefits of this method is that your co-owner will have immediate access to the funds in the account to pay for your bills. The co-owner can then keep whatever is left.
Unfortunately, as the co-owner of the account, they can also spend all of it on themselves, without your permission. Furthermore, that account can also be reached by the creditors of the co-owner, as well as their spouse, if they are going through a divorce.
Joint ownership of titled property
How will my property be transferred to my heirs?
How your property is transferred to your heirs will depend on your estate plan.
How will my property be transferred to my heirs if I have no estate plan?
If you do no estate planning, then your estate will have to go through some sort of probate in Wyoming. The type of probate will depend on the probate value of your estate, and the type of property in your estate.
Value of probate estate is greater than $200,000
If value of probate estate is greater than $200,000, then formal probate is required. This process will take more than three months, and will cost at least $4,000, but probably more of both.
Value of Probate Estate is less than $200,000
If the value of the probate estate is less than $200,000, then it is considered a small estate. The type of property in the small estate will determine the type of probate.
Small estate with real property
If there is any real property in the probate estate, then a for Distribution of
of the then the method of transfer will vary. The most important factors will be whether you are married and whether you have children. The next most important factor is the value of your estate. And finally, the type of property in your estate will also make a difference.
and the nature and value of your prop