While it might sound like a lofty expression, everyone has a personal estate of some kind, no matter the size or scope. One’s personal estate includes their:
- House and other real estate
- Checking and savings accounts
- Personal possessions of all kinds, including furniture and clothing
- Financial investments
- Life insurance
As a matter of fact, one’s estate can also include more abstract “possessions”, including values such as religion, moral system, and work ethic. These, through estate planning, can can be passed down to your family in the best way you see fit.
This brings us to one of the main reasons someone would want to plan their estate in the first place – ensuring what will happen to their possessions after their death. It’s not fun to think about, but while none of us can control the inevitability of death, we do have some control over the fate of what we leave behind.
Estate planning will allow you to decide how your various possessions are transferred, and to whom. This includes both individual friends and family members, and organizations as well. You can also decide not only who receives what, but when they receive it.
Other factors you can have some control over with estate planning include legal fees, taxes, and court costs.
Your plan for your estate can be established with specific written instructions. These instructions are legally binding, and must be honored by the law after you’ve passed on.
What is involved with personal estate planning?
First and foremost, time. This isn’t something that’s accomplished in an afternoon. In fact, it can be a lifelong process. That’s because things change, and situations in your life may determine that certain items and assets are to be redirected towards other people or organizations. Laws also change, and your estate plan should not only be constructed in compliance with the law, but also in a way that turns the law to the highest advantage of yourself and your loved ones. Sound financial planning also plays a major role in estate planning, as this will provide a strong foundation for an extensive, valuable estate to be left behind after you’re gone.
Estate planning should be constructed so as to:
- Avoid unnecessary taxes or fees, or limit them as much as possible.
- Ensure that particular individuals with specific physical or monetary needs get the care they require after your death.
- Ensure that your business or property is transferred to the correct parties at the correct time.
- Have everything transferred to individuals without legally disrupting any government benefits.
- Prevent family infighting as much as possible. Few things are as depressing as family disasters resulting from someone with money passing away.
Without proper estate planning, your money and property is essentially at the mercy of the state after you’ve passed on. However, with proper estate planning, you can have peace of mind knowing that you’re still in control over the transfer of your estate after this life.