What is Estate Planning?

Estate planning is a process you create with the intent to safeguard your estate for the future. Efficient estate planning also seeks to give you the ability to transfer your property as you decide to whomever you choose, with a minimal loss of value and avoiding the costs and waiting time of probate. Probate is a court proceeding that occurs when a person dies without leaving a will, or what is commonly referred to as intestate. Then the state steps in and appoints an administrator or executor to handle all affairs relating to the estate, and distribute and transfer property, according to the laws of that particular state. Any property in the individual’s name, along with tenancies in common, life insurance policies, and any other property payments due are all considered part of the probate estate.

You Create an Estate Plan to:

		Provide enough liquid assets for your estate to cover its expenditures
		Steer clear of probate which can be lengthy, and expensive, and becomes a matter of public record
		Take care of the special needs of your heirs, especially those that are elderly or disabled
		Be sure that your heirs and beneficiaries receive your assets the way that you wanted them to
		Lower expenses that could devalue your estate
		Ensure enough capital and income for the estate to meet preassigned goals

Probate is a lengthy, expensive, and time-consuming process. While the administrator/executor is sorting out your affairs, your family and any other named beneficiaries will not be able to make use of any assets that you have left behind and wanted them to have. Bear in mind that they will need to cover funeral/burial costs as well as other expenditures such as mortgage payments, auto loans, school tuition, and credit card payments.

Real Property

		Real Estate
		Land
		Buildings

Personal Property: Intangible Assets

		Stocks/Bonds
		Life Insurance
		Certificates of Deposit (CDs)

Personal Property: Tangible Assets

		Jewelry
		Cars
		Boats
		Works of Art
		Personal Effects
		Interests in Partnerships/ Sole Proprietorships
		Furniture

In fact, by creating an estate plan, you are aiming to preserve the maximum amount of wealth possible for your intended beneficiaries.

You probably have worked hard throughout your life to build your estate. Your desire to preserve what you have built is what will motivate you to create an estate plan.

Estate planning takes into consideration a wide range of unforeseen future events, such as disability, untimely death, taxes, legal challenges, probate and others, which could ultimately affect the size and transfer of your estate.

The estate planning process will work to fulfill a variety of legal, financial and personal goals. The estate plan carries out your wishes through the implementation of legal documents that specify your instructions and wishes regarding your estate (and in some cases, what will happen to you if you become too incapacitated to make decisions).

Estate Planning Tools
Wills
Trusts
Life Insurance

An important reason why estate planning is essential is because the state has the superior right to its citizen’s property (sovereign right) and to take private property and use it for public purposes (eminent domain). These state rights make it imperative for you to take steps to protect your property. If when you die you do not have a will or any other estate planning tool, the state has a right to take your property and dispose of it as it sees fit.

Another reason to make sure you have an efficient estate plan is to avoid costly estate transfers. Much is involved in transferring property from your name to that of your beneficiaries: attorney’s fees, probate, debts, and death taxes. Estate transfers can be very complex. Estate planning aims to reduce these costs as well as to make the transfer of your estate easier.