What is Estate Planning?

What is Estate Planning

Estate plans aren’t just for the ultra-rich. In fact, most people don’t realize they already have an estate, regardless as to whether they’re aware of it.

For example, estates encompass far more than mansions, yachts and trust funds. They include things such as retirement accounts, checking and savings accounts, investment accounts, vehicles and real property. Just about anything you own can be added to an estate.

Regardless as to how much money you have, estate planning can help ensure that when you die, your assets will be distributed according to your wishes.

Dangers Of Not Having An Estate Plan

When someone dies without a will or estate plan, their assets wind up in probate court. What this means, is that the court will decide how (and to whom) assets are distributed.

Consider the following example: When Price died in April 2016, he did not have a will or estate. Suffice to say, settling his estate has become endlessly complicated, and as of February 2020, the estate is still in probate. In the meantime, his heirs can’t get their money, and the estate continues to pay out enormous amounts of money to consultants, lawyers and other related experts.

What’s Included In An Estate Plan

When you establish a plan, you’ll be able to set up instructions as to how you want your assets to be distributed. For example, if you have children who are in high school, you can stipulate that upon graduation, they’ll receive $X dollars a year for college and living expenses, $Y dollars to use toward the purchase of a car, and  $Z  dollars to use for a down payment on a house.  The purpose of this, is to give you the peace of mind that their inheritance will be spent responsibly.

Some people choose to include a financial power of attorney (POA) in their estate plan. A financial power of attorney is a legal document that designates who can legally make financial decisions on your behalf, should you become incapacitated (and therefore unable to make financial decisions on your own.) If you don’t have a financial POA, you run the risk of having someone other than your designee making those decisions for you.

Have Questions? Call Today To Get Started

If you have questions about the benefits of creating an estate plan and you’d like to speak with a financial expert to help you get started, call Hughes Snell & Co. today to schedule an appointment.