What is an Estate Plan?
An estate plan is a written expression of how you want your assets to be owned, managed and preserved during your lifetime and how you want them to be disposed of upon your death.
Arranging for the distribution of one’s wealth is what estate planning is all about. A critical part of estate planning is creating documents that outline your wishes for distributing your assets after you die. Every individual has an estate plan. If you do not have a formal written will or trust, your estate plan is created out of default by your state.
Every state in America has laws governing the distribution of property when a person dies without a will or trust. If you have not made any provisions for the distribution of your estate before you die, your estate would be distributed according to your state’s “intestate succession” statutes which provide for the distribution of your estate to your spouse and relatives in an order established by your state’s law. So the question is not whether you will have an estate plan, but whether you will have an estate plan of your own selection or one imposed upon you by law.
Unfortunately, many people have neither a will or a trust which would identify their intent and desires after their death. They become so involved in their daily activities that they give little thought to the consequences of their demise. However, many do realize the importance of estate planning documents to protect and provide for their dependents, but people often die prematurely leaving dependents unprotected. The consequences of these acts of procrastination can be financially devastating.
So, as discussed your choices for estate planning are as follows:
- 1. Doing nothing
- 2. Preparing a Will or a Trust