What Is Estate Planning ?
Estate planning involves making plans for the transfer of your assets after death.
Estate refers to all the property owned which includes cash, clothes, jewelry, cars, houses, land, retirement, investments etc. Estate planning involves making sure that most of the estate is transferred to the beneficiaries, paying the least amount of taxes on the estate and assigning guardians for minor children, if any.
Some of the terms that form a part of estate planning include:
- A Will – It is a legal document that lays out the fate of the property after the death of the owner. It states who receives the property and in what amounts.
- A Trust – A trust is an arrangement when the owner of the property entrusts it to a person or an organization. The person or trustee is taxed with managing the property on behalf of the beneficiary or beneficiaries.
- A Power of Attorney - This gives a person or organization the legal power to handle the affairs when the owner of the property is no longer able to do so. The person or organization is referred to as an “attorney-in-fact” or “agent”.
Estate planning should be done when a person is legally competent, which means that the person should be sound mind and at least 18 years old, when the owner of the estate is in good health and free from emotional stress.
Estate planning should be started well in time. It is best done with the services of a certified public accountant or an attorney well-versed in estate law.
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