You have probably accomplished a great deal with your life. Over years you have worked, planned and saved. Perhaps you have even made some sacrifices to achieve your current level of success. Itís a sure bet that you will want to pass along your accumulated assets rather than hand them over for court costs, taxes or attorney fees.
Estate planning is relatively simple process by which you prepare legal documents outlining your wishes for your estate upon your death. It can be difficult to plan for end of your life, but this planning is necessary to protect your family and your assets.
What is your estate?
Your estate refers to your property, those things you own, including your total assets and liabilities. Your property includes your home, car, accounts (i.e. bank, retirement, and brokerage), jewelry, insurance policies and so forth.
The language of estate planning
It is understandable that idea of planning for your family after die can be a little frightening. Familiarity with terms used in estate planning will help you begin to develop some comfort with process.
Estate: Refers to your property or those things that you own.
Property: Includes two categories, real (as in real estate/your home(s) and personal, which includes everything else such as stocks, bank accounts, car(s), jewelry, and so forth.
Intestate: Is a pre, or non-planning state. Dying intestate means that you have died without creating a will or trust to outline your desires for distribution of your estate. Trust: Eliminates many of financial risks in planning for transfer of your estate from you to your heirs upon your death. Risks include taxes, probate, lawyers, creditors, judgments, etc. A trust can provide for management of your estate if you become incapacitated as well reduce death taxes and assure a smooth transfer of your property according to your wishes. Trusts can be revocable or irrevocable. Talk with your tax or legal advisor about benefits of each.