Estate Planning is the act of preparing for the transfer of a persons wealth and assets after his or her death. Assets, life insurance, pensions, real estate, cars, personal belongings and debts are all part of ones estate. Estate Planning is for everybody, not just the wealthy. Without an appropriate estate plan, friends and relatives can spend a lifetime battling over assets. It can be intimidating but it is a necessary step in ensuring your assets end up where you want them.
What is Estate Planning?
An estate plan is the process of planning for the orderly administration and disposition of property after the owner dies.
An estate plan can be as simple as having a will and naming a beneficiary, or as complicated as having several trusts for different purposes in addition to the will. Estate planning involves making plans for the transfer of your estate after death. Your estate is all the property that you own. It can include cash, clothes, jewelry, cars, houses, land, retirement, investment and savings accounts, etc.
After ones demise if he has no estate plan that includes a will, he/she is considered to have died in estate, and the state where he/she live will determine who gets your asset as determined under the states inheritance laws. This means that ones loved ones might be left out at disposition of the property, and in the worst situation when there is no body to claim it then government becomes the owner of the same. Therefore estate planning is very much required as this is ultimately planning for ones own assets with the future perspective.
Objectives and goals of Estate Planning
- Making sure most of the estate is transferred to your beneficiaries
- Paying the least amount of taxes on your estate
- Assigning guardians for minor children, if any
- Helping to reduce or avoid conflict among family members.
- Ensuring that his/her children have the legal guardian of their choice.