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Definition of 'Estate Planning'
The collection of preparation tasks that serve to manage an individual's asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.
Some of the major estate planning tasks include:
- Creating a will
- Limiting estate taxes by setting up trust accounts in the name of beneficiaries
- Establishing a guardian for living dependents
- Naming an executor of the estate to oversee the terms of the will
- Creating/updating beneficiaries on plans such as life insurance, IRAs and 401(k)s
- Setting up funeral arrangements
- Establishing annual gifting to reduce the taxable estate
- Setting up durable power of attorney (POA) to direct other assets and investments
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Investopedia explains 'Estate Planning'
Estate planning is an ongoing process and should be started as soon as one has any measurable asset base. As life progresses and goals shift, the estate plan should move to be in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run higher than 40%), so at the very least a will should be set up even if the taxable estate is not large.
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With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
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These four strategies will ensure that most of your money goes to your loved ones, and not to the government.
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Find out why you shouldn't put off putting your affairs in order.
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Many people try to avoid this process altogether, making things difficult for heirs.
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This document allows a testator, the person making the will, to leave a personal legacy.
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Taxpayers with large taxable estates must take steps to reduce them before 2011.
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Society provides benefits to those who wed and punishes those who don't. Find out how to protect yourself.
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The months leading up to your retirement can be the most crucial in terms of planning. Review your insurance, make a budget and plan your estate so the transition to retirement is as ...
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Deciding what will happen to your assets when you pass away is a must - no matter how wealthy you are.
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What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
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You need an estate plan even if you don't have significant assets. Learn what you need to include in yours.
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