Wealth Building

What is Estate Planning?

It is hard to believe, but all of us have an estate of some sort. Your estate consists of your property including your home, furniture, automobiles, investments, savings and insurance policies.

There are several parts to an estate plan.

A will which is a legal document describing how you wish your property to be distributed.

Power of attorney which is assigned to an individual who will be legally responsible for carrying out your final wishes and those if you are incapacitated. This includes having power of attorney for medical decisions as well. Such as whether or not you will continue to have advanced and prolonged medical treatments in the event your case may be terminal.

Finally, a trust, which describes conditions on when and how your assets will be distributed.

The first step to an estate plan is to inventory all physical and financial assets. Often, this is a good and timely practice as if keeps a running list and inventory of your assets, a practice many of us forget in our busy lives.

Once an inventory is completed, the questions of where the assets will go need to be answered. And that is where a will comes in. it describes your assets and how they should be distributed. Further, a will identifies who will be responsible for executing your will, that is, the executor.

Bear in mind that the disposition and allocation of money may have several tax implications and should be discussed and explored during estate planning. The laws on estate planning and the tax implications have changed significantly over the past decade and are expected to change again in the U.S. after the current federal tax laws for estates expire in 2010. You may want to consult a tax attorney for these matters.

Having a solid estate plan is imperative for any one of any means. An estate consists of all assets you own and those which will come into being after you pass away, such as life insurance and pensions. Take the time today to begin your estate planning and remember to consult with a good attorney who specializes in estate planning for your security and the loved ones you leave behind.