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What is Estate Planning?
Estate planning involves distributing your assets after death to such people or causes according to your
wish with minimum legal complications and the least tax incidence. And estate planning is not just for
the wealthy; nor is it something to be contemplated when you reach the ripe old age of eighty.
Anybody, irrespective of age, with considerable assets and the desire to provide for dear ones even
after death would be doing a great service by planning one’s estate. And the best time to plan your
estate is now when you are still alive and have the requisite mental health to make rational decisions.
An estate plan made during an illness affecting contracting capacity can be challenged, complicating
matters for beneficiaries. Remember, death or a debilitating illness affecting your legal capacity to
contract might strike you any day; therefore, you should prepare for that eventuality beforehand.
The first step in planning your estate is to take stock of all your material possessions (technically
referred to as ‘estate’), and then determine their value. Typical items comprising the estate include:
house(s) and land; bikes, cars, planes and boats; cash-in-hand; savings accounts, pension accounts;
certificates of deposits; stocks, bonds, and mutual funds; insurance and annuities; employee benefits;
jewelry, furniture, art collections; ownership rights/interests in businesses; and claims against others.
Mind you, the list is not exhaustive and your debts and obligations to others are also a part of your
estate.
Next, line up the details of your beneficiaries – names, addresses, and ages. In addition, you should
determine who should be the trustees/guardians in case the beneficiaries are minors at the time of
planning the estate. Also, you must identify an executor of the estate. It would be easy if you line up pre
and post nuptial agreements, divorce decrees, previous wills, deeds of real estate property, and latest
tax returns before you consult a professional estate planner.
Though small estates might be easy to plan, it is advisable to take the help of professional estate
planners, including attorneys and CPAs, to explore all the possibilities to reduce tax incidence.
Remember, estate planning is not a one-time affair. Any change in your marital status, death of
beneficiaries, a birth of a child, or changes in the law will require a review of the plan. For more info
about real estate timing alerts visit our site today!