Estate Planning is the process of managing a person’s estate during his or her lifetime. Estate Planning is an art to manage one’s estates, utilizing wills or power of attorney, tenancy, etc. Estate Planning is the skillful management on the estate to avoid any excess tax, if any, which may result due to non managed property. Estate planning is also aimed at a succession of the estate, which otherwise may not be appropriately distributed among the person’s successors. An unmanaged estate, devoid of any estate planning, may lead to chaos and unwanted circumstances to creep up and then result in factions between survivors.
A majority of people now go for estate planning to avoid violent events leading into property succession after the death of the person. We don’t want our beloved family members to fight amongst each other for our hard-earned property and estates. It can be really tough pill to swallow.
Here comes the importance of estate planning into the picture. A practical and experienced estate planning expert is one who manages estates or properties of his or her client well. He or she has to weigh down all available options and then create a concrete plan and roadmap to manage his or her client’s properties efficiently.
Now, discussing property and estate management, we need to understand the specific tools and mechanisms of estate management. These tools provide a means for effective property tax management and also ensure that estate is well planned and remain productive and also solve the succession dilemma. These tools are listed and described below.
1. Will of Succession for Estate Planning:
A will of succession is a document of estate planning management that incorporates the choice of a person inadequately distributing the person’s property or estate between his or her successors. This is the most uncomplicated estate management documents which can be very useful in the distribution of estate and property amongst individuals. The will system is an ancient type of estate management and is prevalent in most parts of the world.
2. Trust in Estate Planning:
A trust is the other tool of estate planning wherein a person, identified as the Settlor, nominates another person called Trustee for the benefit of self or a third party or group of people. A trust can be used for putting different estates and properties into it. These can be utilized for various purposes as per the need arising. A trust set up can reduce the tax burden and help save money for a person. The trust model is also somewhat an old method of estate planning and property management. This helps in much savings due to reduced taxes, and even distribution of property is effectively managed.
With growing age, health-related issues gain prominence in individuals, and their caring becomes much necessitated. Directives are estate planning documents that can also be understood as advance documents given by a person, in his complete sense, about his or her estate or property’s future in connection with his health. He or she nominates his or her property or estate to be utilized in proportions concerning his or her healthcare being undertaken.
It is a legal procedure, wherein a deceased’s last Will is considered as the final property management or estate management document. Probate proceeds in a court of law and letters of succession are issued to all the parties in direct relation to the deceased and have an interest in the estate or property. Probate is a legal procedure and hence is a time-taking affair of estate or property management tool.
As per the name suggests, occupancy refers to renting out all or some part of a person’s estates or properties in order to reduce maintenance costs as well as generate a good and recurring income from the estate.
Estate or property management can be a very effective means to organize and channelize one’s property for effective taxation and succession of a person’s estate or property. Estate management can eliminate underutilization of capital and payment of excess taxes, which can be a considerable burden otherwise. Estate management opens up avenues and means of properly managing one’s property and estate. Estate management gives a sense of safety and reliability against successions wars creeping up amongst family members. Moreover, an effective estate management can open up new ways and means of utilizing one’s estates and properties to generate some income by tenancy, which can also be a good revenue source coming from the estate or property. Thus one must resort to estate management.