Jordan S. Simon

An estate plan, including a last will and testament, protects your family and finances after you die. Your first step in estate planning is to write a comprehensive will that moves smoothly through the probate process.Make sure you're aware of current estate taxes that may influence your planning and how insurance factors into your estate plan.

Probate is the method by which your estate is legally transferred after you die. When estate planning and writing your last will and testament, keep these tips in mind to help the probate process run smoothly. You can be both specific and general in your last will and testament — it's up to you. You can parcel out individual items to people by name and also let your beneficiaries decide how to divide up your worldly goods.

A trust agreement is a document that spells out the rules that you want to be followed for property held in trust for your beneficiaries. Common objectives for trusts are to reduce the estate tax liability, protect property in your estate, and avoid probate. Think of a trust as a special place in which ordinary property from your estate goes in and, as the result of some type of transformation that occurs, takes on a sort of new identity and often is bestowed with superpowers: immunity from estate taxes, resistance to probate, and so on.

Estate planning often involves setting up a revocable trust or irrevocable trust. Each one of those trusts begins with an intervivos trust — a trust you set up that goes into effect while you're still alive. You then decide if the intervivos trust is revocable, meaning that you can change your mind, or irrevocable, meaning sorry, what's done is done.

Some states are repealing or phasing out their inheritance or estate taxes, but other states that currently don’t have estate-related taxes are instituting an inheritance or estate tax. Whereas most state governments had budget surpluses throughout the 1990s, the early 2000s have been quite a different story with deficits coming back as a result of economic slowdown.

Your will is a living document. Although a will’s intent is to provide for what happens to your estate after you have died, your will needs to change as your life changes. Don’t make the mistake of putting your will away and forgetting about it. You must make sure that the details of your will reflect changes in your life.

Insurance is vital for estate planning: It helps protect your current property, things you hope to attain in the future, and the gifts you hope to leave behind. Take a look at how insurance affects your estate and what types of insurance to consider for your estate planning: Life insurance is a critical part of your estate planning, so make sure that when you purchase a new policy or change an existing one, you look at the rest of your estate planning to get the most benefit from your life insurance.

Even the most orderly estate plans can fall victim to some unforeseen event. To put together a thorough estate plan, take a look at situations that may occur and find out the necessary information for dealing with them. If you're in the process of getting a divorce, you have a lot on your mind. But you also need to look at how your divorce will affect your estate planning.

Trusts can be a great help in your estate planning — they can protect your property, save on estate taxes, and help you avoid probate. Sounds great, right? Well, before seriously considering a trust, you need to understand the basics of trusts and make a well-informed decision about setting up trusts right for you.