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WHAT IS ESTATE PLANNING?
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Although one's "estate" is adequately defined as his
or her property, there is no precise definition of estate planning.
Your estate plan can be viewed as a series of steps to be taken, so that after
you die, your property will be handled in a way that recognizes your values
and wishes regarding your survivors and any charitable interests you might have.
When folks start thinking about these things, some important lifetime concerns
often come to mind, too, such as preparing for possible physical or mental disability.
So those issues are frequently addressed as well when one plans his or her estate. | |
Where to start? The prospect of estate planning can be intimidating
because there is usually no single clear answer to that question—there can be
so many inter-related human and financial factors to consider. Perhaps your
thinking should focus on these two questions:
- First, if you died tomorrow, what would you want to happen?
- Second, what, most likely, actually would happen?
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A good estate plan is designed to bring reality
in line with your desires to the greatest extent possible, given the practical
problems and limitations you face. The steps in the plan might include candid
family discussions, drafting a will and trust, changing the beneficiary designations
on some accounts, buying life insurance, etc. As for "problems,"
experience shows that the most common ones are insufficient money to fund all
of one's goals, and survivors who do not act as hoped or expected.
Let's now take a look at a simple will, which provides a good place
to dig into our study.
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