"Estate planning" is simply the process of making plans related to the disposition of a person's assets (their "estate") after their death. Most people go into estate planning concerned about providing for their family after they die. A good estate plan can ensure that your family is provided for after your death, providing you and your family with valuable peace of mind during your life.
Estate planning can take many different forms, and there are many options to consider when devising an estate plan, and the option that's best for you depends on your financial situation, as well as what you want done with your assets after your death.
Elements of an Estate Plan
The most common, and often the simplest, element of an estate plan is a will. In your will, you can leave anything you own to whomever you want. Assuming that your will is valid (and ensuring that your will meets all the legal requirements for validity is a fairly simple matter), whoever you leave your property to takes legal ownership of it.
Drafting a Will
When drafting a will, you should consider your goals: do you want your spouse to be able to live they lifestyle that you were both accustomed to? Or would you prefer that the money go to charity, or be used to fund college education for your children? There are ways you can encourage the people who inherit your assets to use them in the way you intend. For example, you can make gifts in your will conditional on the beneficiary performing certain acts, such as going to college. You cannot, however, use your will to force anyone to do something they don't want to, but you can use money as a motivator.
Another major element of estate planning, which is sometimes overlooked, is the creation of a living will. A living will is a document in which you make known your wishes concerning major healthcare decisions, in case you become incapacitated and therefore unable to make such decisions for yourself. For example, you can state whether or not you wish to be kept alive by artificial means, if there is not reasonable chance at recovery.
Without a living will, family members often have to guess what their loved one would want. Sometimes, there will even be disagreement between family members over the proper course of action, and such fights can tear families apart. With a living will, your loved ones will be sure that they are carrying out your wishes, even if you are unable to express them.
Obviously, there are many more factors that must be considered during the estate planning process, and the information above provides only a few examples. If you are unclear about what estate planning options are best for you, you should speak with an experienced estate planning attorney.
