Monday, October 5, 2009
Estate Planning: Why is it important?
Article by Pat Perkins
Post by Shawn Chandok
What is an Estate Plan?
Simply put, an estate plan is a blueprint designed during a person’s life for the purpose of specifying the manner in which a particular estate will be disposed of after death. An estate plan typically attempts to conserve estate assets by reducing tax liability and other expenses as well as eliminating uncertainties with respect to the administration of a probate. (A probate is the process of certifying the validity of a will by judicial means.) Depending on your goals, your concerns regarding the legacy you want to leave behind, your family structure and the number and kind of assets you own, your estate plan could be simple or complicated. The process of estate planning usually entails the input of one or more specialized, professional advisors including your lawyer, financial planner, accountant, life insurance agent, banker and broker
Why Do I Need an Estate Plan?
If you don’t own anything of value and have no living relatives, pets or children, then you probably don’t need a will. You can die “intestate” (without a valid will) and your personal items will be distributed according to your state’s laws. However, this description applies to a very, very few. The rest of us whether married or single, young or old and with or without children need to have some sort of estate planning in place in the event of our deaths.
As Ben Franklin once opined, “In this world nothing can be said to be certain, except death and taxes,” but with good estate planning, you may be able to at least reduce some of the taxes your estate will be required to pay upon your death. These taxes, called estate taxes, are determined by an assessment of the total gross value of your estate; they are levied when you die and can eat into the value of the estate you leave to your heirs or beneficiaries. If you want to control the disposition of your assets–home, car, pets, money, stocks & bonds, life insurance, personal valuables–as opposed to letting Uncle Sam decide for you, then you need a proper estate plan. You might not be able to take it with you, but you sure can decide who gets what you leave behind.
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