The Basics of Estate Planning

Estate planning is also an important part of planning for your financial future. But this is the aspect of the planning process that cater mostly to your beneficiaries. Estate planning is essentially the process of trying to dispose of a certain estate in order to provide the most benefit for the estate owner. The aim of estate planning is to make sure that an individual’s estate is passed on to the chosen beneficiaries of the estate owner. In essence, estate planning involves planning today what would eventually become of one’s assets, properties, lands, wealth etc. even after the passing away of the owner.

Contrary to what other people might think, estate planning is not just for the wealthy. Even ordinary people with modest incomes may someday may need estate planning to make sure that whatever assets they may have accumulated during their lifetime may be handed down to the right people. No matter what a person’s net worth is, it is always important to have a basic estate plan prepared. Such a plan would help ensure that your family or chosen beneficiaries may have their financial goals met even after you die.

Having a basic estate plan is not such a complicate matter. It is composed of several elements. The basic tool that makes estate plans a necessity is the will. A will or testament is a document where a person regulates the rights of others over his or her property after death. Another element of an estate plan is the assignment of the powers of appointment as well as a living will or healthcare proxy or medical power of attorney. A trust may also be involved for some people. When developing an estate plan, one should also be considering the effect of federal and state laws that govern personal estates.

The need for an estate plan is actually a means to prevent confusion as well as disputes over an estate’s owner’s beneficiaries. With the intentions of the estate owner put in paper, it is hard for beneficiaries to go against those wishes. An estate plan may therefore help prevent conflicts from developing especially between two or more contrasting beneficiaries of the estate owner.

Estate planning starts when you try to think about where your assets would eventually end up when you die. Making sure that they go to the right people should be foremost in your mind. An estate plan would help you map out what would become of the things that you will leave behind and ensure for yourself, and not only for your beneficiaries, that they remain in safe hands.

 

Posted by Ardent Editor on Feb 27 2008 in Estate Planning

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