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What Does Estate Planning Mean?

Posted on November 12, 2021 in estate planning

If you are like most people, the term “estate planning” may conjure up images of wills and trusts. However, estate planning encompasses much more. It’s vital to understand the full spectrum of estate planning to begin preparing for your future and that of your loved ones. Estate planning can help ensure that your family will be taken care of financially in the event of an emergency—so it’s best to start early.

Everyone has an estate, whether it’s a small one consisting of a few items or an estate that includes land and investments. An estate plan can help you keep your estate in the hands of those you love after your death. It can also help you protect your estate while you are alive.

There are many types of estate plans that you can create. For example, you could meet with an attorney or take your plan to a financial planner. The goal is to have a plan in place that will help you protect your interests and the interests of those who depend upon you.

What Is an Estate Plan?

An estate plan refers to the plans that you make for what will happen after your death. This can include wills, trusts, and powers of attorney. Even if you don’t own a lot of assets now—you should create an estate plan so that your loved ones are taken care of after you pass away.

For a plan to be effective, every aspect of the plan must be well thought out, and every detail must be in place. Estate planning is a very serious matter—so you should never rely on guesswork when making your plan.

Why You Should Start Planning Now

The best time to start planning is now. There are so many advantages of starting early—here are just a few:

  • Your assets will be more easily accessible to your family in the event of an emergency.
  • Your loved ones will minimize the tax burdens on their own estates by using your exemptions and credits before they die.
  • You can put your estate plan in place now so that you don’t have to worry about it after an accident or illness.
  • Your plan will be more effective and efficient than a hasty, last-minute one (which is more likely to have errors).
  • Your business will be transitioned to the right person based on your decision before the event of an emergency.

You should start planning today to make sure that your loved ones are taken care of after you pass away. Estate planning is a serious matter, and it’s important to take the time to protect those who mean the most.

Why Do You Need a Will or Trust?

A will is used to distribute your estate after your death. If you don’t have a will, the state laws in place at that time will determine how your estate is divided up and distributed. This could be detrimental to those you love the most, as your estate may not be distributed fairly.

Another benefit to setting up your will is that you can specify who will take care of your children or animals after you die. You may also choose to list guidelines for raising children if something should happen to both parents. These guidelines often include details such as how your children should be raised, where they should attend school and more essential parenting wishes.

Trusts Can Preserve Your Assets

A trust is used to distribute your estate before you die. You can set up a trust that will allow your assets to be distributed in the way that you want after your passing. This is beneficial for those who have a large estate that they want to protect and ensure that their assets are distributed according to a plan they set in place while alive.

Some other benefits of a trust are that it can help preserve assets from creditors, tax burdens, and lawsuits. It also allows you to have the flexibility to change the terms of your trust whenever you see fit.

A trust can also be used to avoid probate, which can save your loved ones money and time. Probate is the court-supervised distribution of an estate after someone dies. The court approves your will and makes sure that all debts are paid before assets are distributed to the beneficiaries named in the will.

Tips on How to Plan Your Estate

According to financial planners, here are some specific things you can do during your own personal estate planning:

  • Establish a power of attorney: This gives someone you trust, such as a spouse or close friend, the power to make financial decisions for you if you are unable to.
  • Make a will: When making your will, make sure that the people who matter to you most are taken care of.
  • Establish a trust: In a trust situation, one person holds the title to property for someone else. For example, you can create a trust to protect your estate from certain types of lawsuits and provide for the distribution of assets according to your wishes.
  • Decide how you want your assets to be distributed: Many people don’t think about how they would like their property and possessions divided upon their death, but you should think about this now.

Having an estate plan in place can give you peace of mind, knowing that your family will be taken care of after your passing. Estate planning is a critical consideration for everyone and can be used to protect you and those you love from both financial hardships and emotional ones.

Begin Today

Now that you know what estate planning can do, are you ready to start planning? It may seem overwhelming at first, which is why you should also consult with a professional service and an attorney to help you with the process. The more time and effort put into making decisions about your estate, the better off you and your loved ones will be with peace of mind that the people you love and the things you worked hard for are protected.

Contact us today to set up a free consultation and begin your estate planning.