Estate Planning- What is it and how does it work?

Estate planning is an act of preparation for the future. It involves the transfer of your property and assets after your death. Estate planning not only includes properties and your house, but your car, your insurances and other investments, your business, all the furniture and every other big and small thing that you own.  The idea of estate planning may seem scary to some of you, but trust me, it is the biggest and most essential part of your responsibility towards your family. It prevents the misuse of your property and save lots of family disputes.

Everyone needs to plan their estate. It is not the question of your age or retirement, because life is unpredictable and we have to be ready for its challenges.

How does is it work?

  • It all begins with writing up your will. It includes the distribution or transfer of your property, business and other assets among your spouse, children or other friends or relatives. The will includes the name of the trusted person or the executor who will carry out the task of completing the will.
  • The task of preparing and planning your estate needs to be done with lots of considerations and concentration. Handling your home, business and other private possessions is equal to giving a bit of your heart to others. So any hasty decisions should be avoided. You can consult a legal advisor, or even better, you can opt for creating a perfect plan through an estate planning software, which clarifies all your doubts and customize your will in convenient method.
  • Writing the will is not the same thing as estate planning, as people mostly assume. In fact, it can complicate matters sometimes. After the death of a person, the wishes of the deceased has to be passed by the judge or court before transferring of property or money, a process which is known as probate. This case can be interfered with, and exhaust lots of time and money of the suffering members.
  • There are lots of taxes implied on the estate, which are really difficult to handle at the time of death. These taxes can be reduced by taking several steps during the estate planning. For example, a married couple can reduce or finish the burden of the taxes by setting up xyz fund.
  • Choosing a right executor is the most complicated and important part of the process, as it is on his/her shoulders that the responsibility falls upon. The executor is accountable for filing the process of distribution, for evaluating and calculating the assets, taking care of the taxes and debts and acts as an intermediary between the court and family of the deceased.
  • The estate planning consists of planning of the following things: bank accounts, real estate, stocks and securities, jewellery, artwork and much more. You can also include life insurance as part of your estate planning. It acts as the best source of reducing the burden of taxes, expenses and funding of business and future investments.

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