If you pass away without an estate plan, then your stepchildren and stepparents will most likely not inherit any of your assets, at least not directly. All of your assets will be divided according to the laws of intestate succession and that means that your assets will go to the people the law assumes you are closest to, not the people you actually are closest to. The laws of intestate succession include natural parents and natural children, but they do not include step-relatives. For example, if you do not have any natural children, but have step-children, the first people in line to inherit your estate are your natural parents. The step-children will not receive anything. If that is not what you want to happen, you need to make an estate plan.

It turns out that Anna Nicole Smith might have owed taxes when she passed away. That is not unusual, as every estate needs to file a final tax return for the deceased and pay any taxes due. What is more unusual is that the IRS claims that Smith owes approximately $300,000 in back taxes from previous years. In situations like that, the IRS claims the money from the estate.

One of the duties of an estate Executor is to pay any taxes, including unpaid taxes from previous years. It is a good idea for Executors to review tax returns for previous years to make sure that they have been filed and that they are accurate. The sooner the estate pays taxes, the less the fines and penalties. Of course, the best practice is for the deceased to pay all the taxes before he or she passes away.

Dorcy passed away in 2011 as an extremely wealthy man. Dorcy had a Will that left his estate to Hans Kahuna. An earlier Will, however, left the estate to various friends, relatives and charities. Predictably, the beneficiaries of the first Will were not very happy about the second Will and they decided to litigate the matter. The case has recently settled and the settlement is sealed so we do not know who got what. What we do know is that the court awarded attorneys’ fees to the attorneys of the beneficiaries of the first Will.

We do not know if this result is what Dorcy would have wanted. Perhaps, there was undue influence in the second Will. If not, however, upon making the second Will, Dorcy should have completely destroyed any earlier Wills. Destroying a Will is as easy as shredding it or burning it. When you update your Will, make sure that you do not make the same mistake.

If you do not have a General Durable Power of Attorney, then a Probate Court will have to appoint a Conservator for you to manage your financial affairs when you are no longer capable of doing so. That might not seem like that bad of thing, but consider what might happen if your family members disagree about who the Conservator should be. You do not need to think about it in the abstract as the fight over Zsa Zsa Gabor illustrates what can happen.

Gabor’s husband currently has a Conservatorship over her. However, her daughter is not happy with the way he is handling the financial affairs and has petitioned the court for Conservatorship. The husband is fighting back by blaming the daughter for Gabor’s financial woes and claiming that the daughter previously assaulted him.

When it comes to money, families often disagree. If you do not have a General Durable Power of Attorney designating who should be in charge of your affairs, then like Zsa Zsa Gabor’s family, your family’s disagreements can end up in court.

After your child gets divorced, you will want to check your estate plan to make sure that your ex-son or daughter-in-law does not stand to inherit anything from you. When your child gets remarried, you might want to include the new spouse in your plans. A special case arises if the your child’s new spouse has children from a previous marriage. You will need to consider if you want those children to inherit any of your assets. You can change your mind later, of course. While you might not want the children of a previous marriage to be a part of your estate plan right away.  After a few years you may grow to love them as much as your natural grandchildren. If you want to leave them an inheritance, your estate plan needs to reflect that wish.

Anytime there is a significant change in circumstances that affects who you want to leave property to, you should update your estate plan. Be sure to update not only when your circumstances change, but also when your children’s circumstances change.

If you do not plan ahead for your online accounts, then your loved ones will need to find your passwords and hope that they can make changes to preserve or dispose of the account. If your loved ones are unable to do that, then they will have to deal with each individual company that operates the online services and hope that the companies have a process in place for what happens after an account holder passes away. Unfortunately, that process might not be what you want done with the account. For example, when notified of an account holder’s death, a company might automatically close the account. If you wanted the account preserved, your loved ones will be out of luck.

Instead of leaving your online accounts for other people to decide what to do with, make plans ahead of time with your estate planning attorney.

If you suffer from dementia, you will be unable to make healthcare decisions on your own and you will not be in a position to handle your financial affairs. Having a Healthcare Power of Attorney, Advance Directive for Healthcare and a General Durable Power of Attorney in place are important components of making sure that someone you designate can handle everything. You need do this before you get dementia as you will not be legally competent to appoint anyone after the fact.

There are other ways that you can plan ahead for the possibility of dementia. For example, you should have an estate plan that details what will happen to your assets after you pass away. This also can not be done after you get dementia. One possibility is to have an estate planning attorney draft a Revocable Living Trust that gives a trustee the ability to use the trust’s assets to pay for your care. Speak to an attorney about other options for advanced planning.

Estates are challenged through the Probate process. Even though there is a special name for the court that the challenge is heard in, the actual process is substantially similar to other types of civil litigation. Evidence and witnesses can be presented to the court. As the Executor, it is your duty to defend the estate and the wishes of the deceased. An attorney can make sure that you present the estate’s case accurately and effectively. The person challenging the estate is likely to have an attorney representing them. You will be at a severe disadvantage if you do not have one also.

Executors do not have to wait until an estate is challenged to hire an attorney. A Probate attorney can even help ward off challenges before they occur by making sure everything in the estate is handled properly. If you are named the Executor in a loved one’s Will, consider hiring an attorney to help administer the estate.

If you do disinherit someone, that person is likely to be angry. He or she might be confused if they were expecting to receive an inheritance from you. While you will be gone and won’t have to deal with the anger and confusion, your other family members will not be so fortunate. The disinherited family member might seek to challenge your estate in Probate court. The process can be costly and time-consuming for everyone in the family. It can also lead to even more family feuds.

It is not always a good idea to disinherit a family member. However, the choice to do so is yours to make. If you are going to do it, make sure that you disinherit your family member in a way that minimizes the potential for family conflict and litigation over your estate. The family members to whom you do leave an inheritance will be grateful that you did.

For example, some people might want to use a Family Limited Partnership. That legal entity allows you to give property away to your heirs now, yet still retain control over the property. It is often a good way to minimize taxes on the property. However, it is not the best option for everyone and in some cases can lead to greater tax burdens on your family.

Sometimes people will tell you that there is a “perfect” estate planning instrument or entity that works for everyone. While it is often true that a specific estate planning method will work for most people, that does not mean that it will work for you. Even if something does work for you, it might not be your best option. Speak to an experienced estate planning attorney to learn what your options are and for help choosing between them.