Estate planning is the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life and after death, while minimizing gift, estate, generation skipping transfer, and income tax. Estate planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can be determined by the specific goals of the client, and may be as simple or complex as the client’s needs dictate. Guardians are often designated for minor children and beneficiaries in incapacity.
However, this definition has a big gap.
So if there is a big gap, then what is Estate Planning exactly?
What about the management and control of you personal affairs during your lifetime? You need to leave instructions for what to do and who is in charge.
You need to plan for accidents, major medical incidents, heart attacks, strokes, and dementia. This is done with a combination of a Durable Power of Attorney, Healthcare Power of Attorney, Private Healthcare Information Release, and Living Will (different from a Last Will and Testament).
Without this planning, your family may be forced into court in an expensive proceeding to get permission to manage some of your choices. They won’t be able to manage everything. Some things require the permission of a Judge. That means return trips to the court room.
That definition also neglects to mention that part of estate planning should be passing your values and family history to the next generation. You should take the time to make sure the values you want passed on are passed on. You might want to write or record family stories and family history to go with your formal plan.
- Disadvantages of Estate Planning
- Importance of Estate Planning
- Purpose of Estate Planning
- What are the Four Important Estate Planning Factors?
- What Factors Should You Consider When Planning Your Estate?
- What is Estate Planning?
- What is the Main Purpose of Estate Planning?
- When Should You do Estate Planning?
- Who Needs an Estate Plan?