Most individuals who have been able to enjoy success have at least heard of estate planning. You may have heard of the subject or even done some amount of personal research. Estate planning is a large subject that can feel impenetrable for those on the outside, though.
Consider this your primer on the basics of estate planning. Simple things like what estate planning is and what it’s good for will be covered, as well as a few other important pieces of information. By the end, you should have a sturdy groundwork for the subject and be ready to begin your estate planning process or at least be prepared to ask informed questions.
What does estate planning do?
Estate planning is the process of making arrangements that will determine what happens to your assets, possessions and overall estate after you pass away. One of the main goals of estate planning is to minimize or even bypass having to pay various fees and taxes. These arrangements are most effectively planned with the aid of an estate planning attorney and made binding with various documents and legal entities.
How long does this take?
How long it takes to plan a person’s estate can vary greatly. If your estate is modest, you may be able to make your arrangements in a single session with a professional. If you have considerably more assets or have specialized needs, such as a complicated trust fund, it can take a month or longer to properly draft your estate plan.
What are the most important part of an estate plan?
People often ask what the “most important” part of estate planning is. The reality is that it varies from individual to individual. A trust fund with several variables may be the most important element for someone who wants to partition college funds to a grandchild. Conversely, a simple will may be the most important document for a young parent.
A few basic documents that virtually no estate plan should be without, however, include a will, an advance health care directive and a power of attorney.
Will plans need to be updated?
Many people choose to update their estate plans. A good rule of thumb is to update your plan every three to five years, or after a major life event such as getting married, having a child or receiving a sudden windfall. There is no limit to how often you may update your estate plan. If your financial plan changes frequently, you may choose to update your estate plan as often as every quarter.
There are no bad questions when it comes to estate planning. You have worked hard and having a tailor-made plan for your estate is one of the best ways to live with better peace of mind. If you have any other questions, please do not hesitate to ask.