An estate is the net worth of a person at any given time. It is the sum of a person’s assets minus all the person’s liabilities held at the time. Assets included in an estate include all legal rights, interests, and entitlements to property of any kind. The issue of estate planning is important in both your death and when you file for bankruptcy protection.
Estate Planning in Death
What happens to your net worth when you die can be very important to your estate and those who might inherit the estate or a portion of it. In the absence of a will and/or executor of an estate, a state’s intestate succession laws usually govern how an estate is disposed if there is any assets remaining. If there is no executor or will left, a probate court will provide an administrator to handle the estates financial affairs, pay the liabilities, and divide what estate is left amongst the legal heirs according to state intestate succession laws.
If you think you are going to have an estate of any value when you die, to avoid having the state divide your estate in such a way you might not prefer, estate planning is almost a necessity. Good estate planning for death should include an updated Last Will and Testament with a named surviving executor of the estate. Once the will has been probated, the executor can legally carry out your wishes concerning the distribution and disposal of the estate.
As part of estate planning, you might want to consult with an attorney who understands estate laws. They can help you understand your legal responsibilities toward the estate as far as taxes, liabilities, and the sale and distribution of assets.
Estate Planning for Bankruptcy
Most people don’t think about their estate when they are considering filing for bankruptcy protection. They think more about being bankrupt and not being able to pay their bills. In effect, though, most people have an estate even if they are completely bankrupt.
Remember, any assets you own are a part of your estate. A creditor cannot get your assets without going through proper legal channels. Filing for bankruptcy protection is all about protecting you estate so that you can keep as many assets as bankruptcy laws will allow in order to make a fresh financial new start.
Estate planning for bankruptcy is very important before you file for protection. Determining what assets and liabilities you have plays a big role in determining what type of bankruptcy you will need to file in order to protect the most assets you have.
There are very few people who consider filing for bankruptcy protection who do not have some type of assets. Your clothes, jewelry, home, automobile, bank account, glasses, and the like are all considered assets.
Each state’s bankruptcy law helps determine which assets you can keep when you file for bankruptcy protection. Estate planning can include a strategy for keeping assets as determined by state of federal exemptions. Choosing which to use is a part of estate planning for bankruptcy.
Estate planning for bankruptcy can also include planning the type of bankruptcy you should file. For instance, if you own a home outright, you do not live in a state that allows enough homestead exemption to protect your home, but you still qualify to file a Chapter 7 bankruptcy, you may want to file a Chapter 13 bankruptcy instead.
A bankruptcy attorney can help you in estate planning for bankruptcy by providing you with alternative avenues you might take for protection of your estate.
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