Estate planning is the process of arranging for an orderly disposition of your assets after you pass on, in a way that avoids legal and financial complications, excessive fees and expenses, and, in some cases, taxes. It recognizes that, with a little forethought, the grief and stress on those left behind can be eased during what is sure to be a chaotic time of transition for them.
Without estate planning, you have no say in who inherits your money, your family may have to pay taxes, and probate could be more complicated and time consuming than necessary. Estate planning prepares for managing the financial and administrative transitions related to your death. Hopefully, it softens the impact of your death on those you leave behind by clearly documenting your wishes regarding administration of your estate, identifying your assets, providing instructions as to the distribution of the assets upon your death, and naming the person or persons responsible for managing the distribution of the assets. While the most obvious facet of estate planning deals with who gets what after you are gone, there is much more to it.
Estate planning seeks to protect your assets against the claims of unintended recipients in order to preserve them for your chosen beneficiaries. Someone may seek to lay claim to some of your assets when you are gone. It may be a wealthy relative that doesn't need any more wealth, or a "close" relation that isn't close at all, or the IRS looking for more tax revenues. Careful estate planning can prevent these claims.
Estate planning provides for those you leave behind upon your death. Although financial matters and asset distributions tend to be the primary focus, there is so much more for you to consider. Estate planning can assure continuing support and care for those you leave behind. Whether you are concerned about leaving an aging spouse, a developmentally disabled dependent, a minor child, or a cherished pet, estate planning can be used to create solutions that help protect those who must carry on without you.
Estate planning can be used to document your instructions well in advance for the myriad details associated with your death. Do you want burial or cremation? Do you want a funeral or a memorial service? Do you have special desires regarding your burial site? If you consider these details, not only can you document your desires, but you can make provision to cover the costs that are certain to be incurred. These are just a few of the details that can be addressed during the estate planning process.