Estate Planning

Purpose Of Estate Planning

Here you can learn why it is important to plan your estate, as well as the questions that will need to be answered when planning your estate.

The real purpose of estate planning is to properly plan for your own disability or death. Have you heard of the 5 P’s? It’s a saying composed of 5 words all beginning with the letter P and it’s used quite frequently in the military (military personnel have been known to add a 6th word beginning with P, but I’ll forego that one here). The saying goes like this: Prior Planning Prevents Poor Performance.

Without you making your own choices the courts, or the laws, will make choices for you. And I guarantee you those choices will be significantly different from your own in just about every case. So, the purpose of an estate plan is that by you thinking ahead and putting your plans into action through the execution of properly crafted legal documents, you avoid needing court or governmental intervention on your behalf. And, as I said, will likely result in something other than what you wanted.

The true purpose of an estate plan is to accomplish a number of goals. Your estate plan will depend upon your particular circumstances. In planning your estate, your goals and wishes are given the highest priority. In addition to your goals and wishes, you should also consider your family and its needs, as well as the nature and extent of your property.

To be able to properly achieve the purpose of estate planning (to be prepared), you will need to answer a number of important questions. A major question will concern who will receive your property upon your death and the manner in which the property will be distributed.

Depending on your circumstances you will determine:

• Who will administer your estate after your death.

• Who will be the guardian of your children.

• How federal estate (death) taxes and other taxes can be minimized.

• How your executor or trustee will pay for death taxes if any are due.

• How you and your spouse should hold title to assets.

• If you cannot care for yourself, who will take care of you.

• If you cannot manage your estate, who will do so on your behalf.

• Who will receive the proceeds of your insurance and/or retirement benefits.

In answering many of these difficult questions, you will be able to see the true purpose of estate planning: the effects of these decisions are too important to leave them up to the courts.