What Is “Estate Planning”?
First, it’s important to know that estate planning is not just for the wealthy. Everyone has an estate. Even if you have a very modest estate—it could be as simple as a bank account—you still need a plan.
You still need several very important documents to avoid the need for a guardianship or conservatorship should something – such as an accident– happen to you so you are unable to take care of things yourself.
What is Estate Planning?
In a nutshell, an estate plan is the creation of a plan for managing your assets while you are alive and distributing them after your death. The primary objectives of an estate plan include the following:
- Ensuring that your assets will provide you with the income and resources on which to live comfortably;
- Ensuring that upon your death your assets will go to the people and/or organizations you wish;
- Minimizing estate taxes, fees and other costs, and
- Designating the best person(s) to make financial and/or health care decisions for you in the event that you become incapacitated.
An estate plan is a basic set of documents that helps us plan for life’s certainties. The phrase “estate plan” sounds like a complicated set of things that only very wealthy people need. But in reality it refers to the critically important documents that almost everyone needs, whether our financial and familial affairs are simple or complex.
All of the documents that comprise an estate plan help us avoid problems that often arise upon death. Many of these are problems are things we never think about during life, or things which may be so troubling or overwhelming that we push out of our minds. However, in the absence of a solid estate plan, these issues- if they arise- will have to be resolved by the courts and state law.
Who is An Estate Plan For?
EVERYONE! Why is an Estate Plan so important to address sooner than later?
- We need to plan for incapacity, accidents, etc.
- Your Health Care Directive is VERY important!
- Death can create tax problems
- Medicaid issues can be VERY complicated
- You can avoid probate and save tons of money, time, trouble, and publicity.
The Purpose of an Estate Plan
A properly-prepared estate plan lets each of us decide for ourselves the best choice for our own families (such as who should care for my minor children, who should receive my property, which charitable organizations should receive a share of my assets, and who should wind up my affairs).
But if you fail to plan, you plan to fail! Let’s talk about all the benefits of getting a plan started right now! A properly crafted estate plan provides the best means to ensure that we pass our hard-earned wealth to our descendants with a minimum of cost (both emotional and financial).
Your estate plan will also give you peace of mind knowing that all of your affairs are in order. Your will allows you to appoint the guardian of your choice for minor children if both parents die. Your will can also specify how your property should be divided and apportioned, and it can help avoid any taxes that may be due upon your death.
An advanced health care directive and durable power of attorney effectuate many of these same goals during a person’s life. No one wants give birth to and foster the growth of a beautiful family only to see that family fight over property and possessions when they are gone! To prevent this, you need a professional estate plan tailor-made to your unique requirements and specifications.