Estate Planning 101 - What is an Estate?
A brief discussion of what makes up an "estate", tools that should be a part of your estate planning and addressing the myth: "Unless I'm super rich, I don't need a plan for my estate."
What is an estate?Estate: the assets and liabilities left by a person at death. May include but is not limited to cash, bank accounts, property, personal belongings, debts, retirement accounts, and/or life insurance proceeds.
Myth: Unless I'm super rich, I don't need a plan for my estate.Reality: Estate planning is not just for people with mega bucks. Taking time to plan your estate can include making provisions for emergencies that leave you unable to make financial or health care decisions (think bike accidents leading to emergency rooms and multiple surgeries, comas, or getting stuck traveling abroad).
Planning your estate before you pass away will also stream line the process for your heirs after you are gone. Failure to provide a plan or a road map for your heirs can prove costly and lead to fights that tear apart families. That heirloom cookie jar passed down from Grandma could very well turn into a million dollar cookie jar when families can't get along. Crazy, but true!
A clear estate plan is also essential for naming guardians for your children. An estate plan can direct how your money will be used for your children. Even individuals who don't have much in the way of assets need to name guardians. They may even consider a life insurance policy to provide for their children should something happen to them.
Putting a plan in place to take care of your estate after you are gone is just one more way to take care of your family. Prepare now to ease the transition and to keep your family out of gut wrenching disputes.