What Is Estate Planning?
Estate planning is the process of organizing an individual’s personal and financial affairs in a way that maximizes the individual’s enjoyment of his or her own estate during life while planning how that estate should be distributed and used upon that individual’s death. Additionally, estate planning is used to ensure that your final property and healthcare wishes are honored, and that you and your loved ones are taken care of when you are no longer able to care for them or yourself. Based on your assets and goals, estate planning can involve financial, tax, medical, and business planning as well.
How Can Estate Planning Help You?
Estate planning can help you by providing for the distribution of your business, home, and personal property upon your death. For example, your estate plan may involve deciding how you want to use and manage your business, investments, real property (such as a home) and personal property (such as family heirlooms, jewelry, cars, etc.) during your life, and what happens to these items upon your death. You can decide whether you want to give your property to a certain family member, or friend or if you want to divide your estate equally among certain individuals or pass entirely to charity.
Moreover, estate planning allows you to plan for your own care, or the care of a minor child, if you become unable to care for yourself. This is often seen where someone is in a coma or develops cognitive impairment such as dementia. Along with other issues, you can leave detailed instructions on if and when life support should be used to keep you alive and whether or not you would like to be an organ donor.
With your estate plan, you can also appoint a specific person to replace you as the primary caregiver for your minor child, i.e., nominate a guardian for your minor children in the event you lack legal capacity to care for them or if you pass away when your children are minors. Without nominating a guardian, if you (and your spouse, where applicable) pass away while your children are minors, someone must petition the court to become a guardian of your children. It may not be the person you would want to be the guardian.