When beginning the process of planning your estate, there are a few simple things to keep in mind. These are often overlooked or not understood.
First, the recipients of your will or living trust typically do not pay tax on the gifts. There are some situations where this does happen such as income from a tax deferred account (Income in Respect of a Decedent or IRD). Because there is no income tax due generally, there is no need to consider the tax status of a possible beneficiary.
Second, some items will pass without inclusion in your will or trust. Items held as joint property such as vehicles, homes, etc. go to the other person who holds title. This can be an effective way of avoiding probate for some assets. However, you must be aware of this when planning your estate.
Third, you can specify specific items of sentimental value go to certain beneficiaries. Too often the focus is only where your most valuable assets go. While it is important to determine who gets the house or who gets the money in bank accounts, items of sentimental value can lead to the most turmoil between family members. This can be avoided by either spelling it out in the will or in a separate document referenced in the will.
Finally, all of your estate planning efforts mean nothing if the documents cannot be found. Typically, if a will is not found it is presumed that it was destroyed by the testator, meaning the testator intended to revoke the will. Some people choose to keep the documents in a fireproof safe at their residence, others in a safety deposit box at their bank. In any event it is necessary to let people know where they can find it. Especially if the document is an Advanced Health Care Directive, which is necessary for your agents to make decisions for you, in the event of your incapacity.