Estate Planning Introduction

Posted by BeingPreparedAdmin on Dec 20, 2011 in Estate Planning | 0 comments

We all know that at one point we are going to die. When this happens we may leave behind real and personal property. Real property is real estate and personal property is our other possessions: cars, jewelry, bank accounts, etc.  The purpose of estate planning is, while still alive, to plan on how you want to distribute your real and personal property after you are gone. It should be set up to eliminate extra administrative costs, reduce taxes and quarreling over your property during their time of mourning.

The first thing about an estate plan is to consult an attorney that specializes in estate planning. This is something that you should leave up to chance. They will be able to help you understand both state and federal laws that are applicable to your situation.

There are four main parts of the estate plan I had created for our family.

1. Living Will – This part is to give direction of what is to happen if you become permanently incapacitated. For instance, if you are on life support how you want them to proceed medically. This takes their emotions out of it and your desires will be enforced.
2. Power of Attorney – This part gives power to a person to act on your behalf when you become incapacitated. For instance, if you are on life support the financial part of your life still needs to be addressed. Financial institutions will require this to make changes or get access to your finances.
3. Will – This part is to assign a representative or executor of your real and personal property.  It can also include who will receive custody of your children after your passing. If not, your children could end up in foster care until the courts have cleared everything up.
4. Trust – This part is designed to minimize the amount of taxes, avoid probate and protect your inheritance. There are certain laws and the trust should be set up to take advantage of those laws and protect your estate.

One of the biggest things that estate planning brings is the peace of mind knowing fully that your loved ones are taken care of.