What to Consider When Creating an Estate Plan

Estate Planning is the process of planning for how a persons property will be divided when they die or are no longer able to care for themselves. In this case, property refers to what a person owns and does not only include real property, like homes and vehicles, but also things that you can not physically touch, like a persons stock portfolio or their interest in a business.

Estate planning is extremely important, as without it, there is no way to ensure that ones property will be fairly divided and there are also many people who will have their hands out once no one is guarding the till, as it were.

Why Estate Planning is So Important

One of the biggest reasons to preform estate planning is of course to ensure that your family and friends are cared for and are able to benefit from your assets.

This goes deeper than just ensuring your family is cared for, as all too often, dividing a persons assets brings out the worst in a family. Unfortunately, it is common for perceived slights or unfairness to truly polarize a family and cause splits. By stating your intentions of who gets what property, you can help to head off these types of problems and ensure that your property gets fairly split up or at least split up as you desire.

Another reason that estate planning is so important is because the government, both Federal and State, will try to get as much money as possible from your estate, so minimizing estate taxes is essential.

Sadly, the old adage is true that if the government can tax it, they will, with death being the perfect example. A big part of estate planning is trying to minimize the death tax, so that your family and those you care about can benefit, rather than the government.

The Death Tax or Estate Tax is not the only legal problem that can occur after death, but often, especially in the case of interstate families, without a proper legally binding will, the government will end up playing a big role in how a persons property is divided. As a result, it is common for estates to end up in a "legal limbo," sometimes stretching for years.

What to Consider During Estate Planning

It is very important to consider all of a persons property, both the tangible property, such as real estate, as well as the intangible property, which includes things like stocks and business interests. However, you must not only consider positive assets, but also any debt, such as a mortgage or credit card line, as these will need to be paid as well.

Another factor that must be considered is that a persons estate can change over time, sometimes very quickly, so it is important to regularly keep your estate plan updated, as well as writing it in a manner that leaves few questions as to your intentions and helps to account for somethings that might not be explicitly in a persons will.

The will, which is of course the legal document used to determine how a persons property is divided after their death, is a big part of the estate plan, although there are also other considerations. However, the will is one of the most important documents and should take into account not only who gets what, but also who is in charge of ensuring the will is carried out. This refers to the executor of the will and is a very important decision.

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