What is Estate Planning? And, what does it involve?
First, an “estate” is everything you own (your home, bank accounts, IRAs, personal belongings, etc.). So, “estate planning” is the process of putting a plan into place that addresses where your assets go when you die.
But, estate planning is not just about what happens to you after you die. There is a very important life-time component to estate planning which addresses what happens to you and your assets while you are alive.
A well-designed estate plan will allow you to decide who will control and receive your assets at your death for the least amount of cost. And, it will protect you and your assets in the event of your incapacity during your lifetime.
So, who needs to do estate planning? Really, EVERYONE should have some sort of plan in place that is best suited to their individual needs. There is no “one size fits all”. And, a failure to perform any estate planning most definitively leads to uncertainty and increased legal expenses.
Most often it is older adults thinking about leaving an inheritance to their children without too much hassle or too much expense. Yet, families with young children, or especially children with disabilities, really need to consider an estate plan that uses delayed distribution trusts or special needs trusts. Or, if you and your spouse are concerned about protecting your children’s inheritance if you or your spouse remarries a second (or third) time, then you may need to consider marital trusts. Does your child have creditor problems or a marriage mate that you really do not like, or is simply not good with money? Then, you may need to consider a discretionary trust as a part of your estate plan. In addition, there are other considerations for which legal documents are drafted to meet your “special purpose” estate planning needs. Once again, your estate plan should be a customized plan suited to your personal objectives and not a “one size fits all” form.