Estate planning arranges for the transfer of individual assets at the time of death. An estate entails all property owned by the individual at death before it is distributed by
either a will, intestacy laws or via trust. An estate may include various properties such as automobiles, jewelry and artwork, stocks and securities, bank accounts, real estates, life insurance policies among others. Typically, the estate planning process involves a lot of
consultations with many professionals’ advisors such as financial counselors,
lawyers, life insurance representatives and accountants.
Why Estate Planning?
Regardless of the age, size or complexity of your estate, having an estate plan can benefit you in a number of ways. Firstly, it ensures that all your property will be distributed as per your personal. Typically, it ensures that your property is transferred to those you have identified, as quickly and with as few legal hurdles as possible.
Secondly, estate planning also helps you to reduce the amount of taxes you will have to pay to have your property passed on to your loved ones after death.
Thirdly, you are able to avoid the time and costs associated with the probate process by making use of the various estate planning tools such as a will and trusts. An estate plan also dictates the type of life prolonging medical care that you would wish to receive should you be unable to make your wishes known when the time comes.
Estate Planning Tools
Estate planning utilizes a number of tools to ensure that the asset distribution process is done in the best possible manner. Some of these basic instruments are listed below.
The Will- This is the most common estate planning tool. A will shows who will inherit what property and possibly in what amounts. In addition, it indicates who will be the guardian for minor children and also indicates what burial arrangements will be made at the time of death.
The Trust- A trust is an arrangement in which a trustee body distributes the assets according to the terms of the trust. A trust can either be created during the individual’s life or through a will.
Health Care Directives- These ensure that an individual’s medical wishes are carried out when they are unable to decide on their own. A health care directive consists of a health care declaration and power of an estate planning attorney for health care.
Having an estate plan is very important for everyone who cares about their family. Even though you do not have many assets, creating a will is essential so that your assets can be immediately distributed to your beneficiaries as per your wish. It is also necessary that you carry out your estate planning as early as possible to avoid any inconveniences during the old age. In case it is your first time to create an estate plan, it is important you engage a good advisor to guide you through the process. This will allow you to come up with a good estate plan that will be beneficial to your loved ones.