What is estate planning?

March 7, 2015

Estate planning involves planning for both incapacity during your lifetime and planning for the disposition of your assets in the event of your death.  If you became incapacitated, who would make medical decisions for you?  Who would pay your bills?  If you were to die, who should receive your assets?  Who should be in charge of making sure that your estate is managed properly?  Are estate taxes an issue, and if so, are you taking advantage of all available estate tax exemptions?  Is avoiding probate important to you?  These are some of the many questions that may be answered in the context of an estate plan.

Some clients will say “I don’t need an estate plan, since I don’t have an estate to plan.”  By this they mean that since they don’t feel like they have significant assets, they don’t need an estate plan.  However, it’s not just about money.  Many elder law professionals will tell you that the most important part of an estate plan is planning for incapacity (signing a Durable Power of Attorney and Appointment of Health Care Representative).  The person you appoint to handle your financial affairs and make your medical decisions upon your incapacity can have a very significant impact on the quality of your life.

Even clients who don’t feel “rich” frequently find that significant assets will pass in the event of their death.  They may not feel rich now, since their main assets are their home and an Individual Retirement Account, but from the future beneficiary’s point of view, significant assets are involved, and proper planning is important to mazimize the benefits to your beneficiaries.