Creating an estate plan is something many individuals don’t think about until they have a family or significant assets. However, it is actually a wise step for anyone to take for several reasons. Such plans include legal documents that may be necessary in the event of an unexpected health issue. A good plan can help maximize the legacy a person leaves to their heirs, regardless of the size of their estate. To fully grasp the five parts of a good estate plan, it is important to first understand what an estate plan is.
Many people hear the word “estate” and picture a mansion on a hill, with manicured gardens and luxury cars in the garage. While this is technically part of a wealthy individual’s estate, an extravagant lifestyle is not a requirement for estate planning. “Estate” simply refers to anything an individual owns, including cash, cars, real estate, and any other assets.
Most people want the things they own to go to one or more of their surviving loved ones in the unfortunate event that they pass away, and an estate plan is the best way to ensure one’s wishes are carried out. The legal documents that make up an estate plan protect an individual’s assets and property and specify who will handle those assets in their absence. The plan is a way to facilitate the family’s ability to ensure their loved one’s wishes and needs are met when they are unable to do so themselves.
There are three primary objectives of any good estate plan, including the following.
If an individual sets up either of these legal documents as part of their estate plan, it is essential to include that information on accounts such as insurance policies, 401 Ks, and IRAs.
Once an individual has a solid understanding of what estate plans are and how they work, it is important to know what they should include in their plan. The following five components are part of an ideal estate plan.
Estate plans should be reviewed regularly, as life changes may alter an individual’s circumstances. Paul Campo has over three decades of experience assisting clients with honesty and integrity. Visit our website today to see how he can help you.