What is Estate Planning?
What is Estate Planning?
A fancy term, probably most of us would have just ignored it assumingly that this is not for me. To put it simply, estate planning involves deciding how you want your assets to be distributed after you die (or become unable to make your own financial decisions). Estate planning can be complicated, so it’s best to consult a financial adviser and a lawyer when drawing up your estate plan.
Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.
To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.
When should you start estate planning? It’s never too early to start.
Your first step: Take stock of all your assets. These include your investments, retirement accounts, insurance policies, real estate, business interests and valuable items – in financial or emotional terms – such as jewelry, cars, baseball card collections or your great-grandmother’s good china.
Next, decide what you want to achieve with those assets and who you want to inherit them. This is also the time to think about people you would trust to handle your business affairs and medical care in the event that you become incapacitated.
How do you do effective estate planning: Will or Creating Trust?
One can plan his estate in two ways i.e. either by writing a Will or by creating a Trust.
Writing a Will as we all know has been a traditional way of passing on all what a person has earned and what he has inherited from his ancestors to his future generations.
Trust has been used as a vehicle by many people in the past to pass on the wealth in a planned manner and over a period of time.
A Will is a legal declaration of a person’s intention with respect to his property which he desires to be carried into effect after his death. Thus a Will operates only after the death of the person.
A Trust involves transferring of one’s estate to a Trustee for the benefit of certain beneficiaries which may include the person creating the Trust who is called the Settlor. A Trust provides for management of the estate during one’s lifetime and also provides for distribution and management of one’s wealth post demise in a planned manner over a period of time.
What is more Exciting is, you can make Online these days, hassle free for a small fee.