A couple of weeks ago we started a new blog series aimed at answering some basic estate planning questions that people unfamiliar with the field might have. Even though we have been blogging about estate planning for quite some time, some of our new readers might not be as familiar with the concepts we talk about as those who have been following along with us. To help educate any potential new readers, we are going to take a look many of these basic questions over the coming weeks and months.
This week, we’re going to continue the series by looking at exactly what we mean when we talk about “estate planning.”
Basic Estate Planning Question 4. What is an estate?
It’s very common for people to confuse the idea of estate planning with the idea that an estate is a large piece of property, or large home. When people view estates like this, they naturally assume that only wealthy people need to participate in estate planning. This isn’t true.
When you talk about the legal concept of an estate, what you are talking about is the collection of property and legal interests you leave behind after you die. Since everyone will die, everyone will have an estate, regardless of how wealthy they are, or how much they own. Further, should you become incapacitated and be unable to make decisions for yourself, you will also leave an estate.
Basic Estate Planning Question 5. What is an estate plan?
If your estate is what you leave behind after you die, an estate plan is what you leave behind in an attempt to control that estate. The law recognizes every capable adult’s ability to make certain types of choices that will affect their estates. For example, if you leave behind property after you die, you have the right to make decisions about how you want that property distributed as inheritances. Further, should you become incapacitated, you have the right to make decisions about the kind of health care treatment you wish to accept or refuse.
Basic Estate Planning Question 6. What do I have to do to make an estate plan?
That depends on several factors, but it basically boils down to creating documents through which you make various types of choices.
The estate planning process involves evaluating your desires, your needs, and your legal options. What’s important to point out, is that you can only create an estate plan by creating the kind of tools recognized by the law. Only by creating these tools, and by making sure they comply with the relevant legal requirements, can you be sure that your estate plan will be effective.