Introduction to Estate Planning

Estate planning is the creation of a comprehensive financial plan to provide for your spouse and heirs upon your passing.

The old saying tells us that we can’t take it with us. It is true. The question is what we do with it then. People often start their life just trying to make ends meet. As time goes on, they begin to acquire a certain amount of wealth. If they are lucky and smart, they provide for themselves and for the people that are dependent on them while at the same time accumulating property and even more wealth. When they die, this represents their estate. Estate planning is the process that determines what happens to all of this after death.

It is never a good idea to put off any element of financial planning. Timely decision making is one of the essentials of success. In Estate planning, this is truer than in any other area. There is no margin of error. The proper time to begin your personal Estate planning process is as soon as you have anything at all that even begins to resemble an estate. The failure to do this not only takes you completely out of the decision making process after death, but can lead to some serious problems for the people you leave behind.

The most important tool of Estate planning is the will. Many people neglect the preparation of a will because they do not feel they have sufficient wealth in their estate to justify one. This is not true at all. Just about anyone who has any type of asset should have a will. The will is a legal instrument that speaks for your wishes after your death. There are other tools such as trusts that are a part of the estate planning process.

Estate planning works very much like other forms of financial planning. It involves the preparation of a comprehensive, coordinated plan that ties together all the various aspects of your financial situation. It involves a complete inventory of your assets. This includes not only your physical property, but also need to consider your Insurance policies, your retirement funds, annuities, and any other source of income. The plan includes the selection of beneficiaries. The beneficiaries are the people that will receive your assets after your death.

Estate planning is also very much a taxation issue. The tax implications of estates can be complex and in some cases can have devastating impacts on the people that you leave behind. Instead of providing for them, poor tax planning can put additional burdens on them after you are gone. Estate planning requires a lot of knowledge of issues that are sometimes confusing. Insurance professionals and financial planners can help you navigate through the murky waters of Estate planning. It is true that you can not take it with you, but you should have the final say about where it does go.

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