Your estate is comprised of everything you own— your home, other real estate, autos, banks accounts, investments, life insurance, and personal possessions. Taking an inventory of your assets is a good place to start. Estate planning is not just for the wealthy No matter how large or how modest, everyone has an estate.
When the inevitable happens, you probably want to control how those assets are given to the people or organizations you care most about and eliminate or minimize estate tax. 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.
That is basic estate planning; planning in advance and naming whom you want to receive the things you own after you die. However, good estate planning is much more than that. It should also:
- Include instructions for your care if you become disabled before you die.
- Name a guardian and an inheritance manager for minor children.
- Provide for family members with special needs without disrupting government benefits.
- Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce.
- Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
- Provide for the transfer of your business at your retirement, disability, or death
- Minimize taxes, court costs, and unnecessary legal fees.
- Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family, financial situation, and tax laws change over your lifetime.