For individuals who have been able to manage money successfully throughout their life, they’ll likely want to decide what happens to their estate after they’re gone. For those of you who haven’t thought of this yet, it’s never too early or late to begin estate planning.
What is estate planning?
In simple words, estate planning is about arranging how you will leave your property and the money you have accumulated when you die.
Estate planning includes a variety of benefits, some of which include:
The act of writing your will and naming someone responsible to carry out your wishes to ensure that things happen in accordance to your wishes when you pass away.
It gives you the ability to decide who will look after your children in case you pass away while your children are still minors. This ensures that your children are in the right hands, and will be well looked after well, even in your absence.
It bestows you with the ability to make sure that the assets that you have amassed in your lifetime are distributed in accordance to your wishes.
At the same time, estate planning allows you the flexibility to make sure that you arrange your assets in a way that leads to you paying only the minimum taxes necessary.
Estate planning allows you to arrange insurance to cover costs, provide for your survivors and pass on assets.
It allows you to clearly make arrangements such as identifying who will handle your affairs if you become unable to manage them yourself, and giving them directions.Definitions related to estate planning:
Estate:
Estate is the money and property that you leave behind when you die.
Estate planning:
Estate planning is the act of arranging how you intend to leave your money and property and take care of your spouse, children or others once you die.
An estate planner is someone who provides you with help in leaving your money and property and taking care of your spouse, children or other family members when you die. Estate planning requires a special knowledge of law and taxes.
Will:
A will is a legal document that sets out the terms regarding what you want to happen to your money, property and other assets after your death. A will can also set out certain plans that will ensure that your children are taken care of or other family members who count on you financially.
Executor:
An executor is someone you name to carry out the wishes that you had set out in your will.
Beneficiary:
A beneficiary is a person or institution you give money to in your will. This is usually done under an insurance policy or trust.
Death benefit:
Death benefit is the money that your life insurance or other plan will pay to your estate or beneficiary after your death.
Power of attorney:
It is a legal arrangement. This arrangement allows you to give someone the power to make property and health care decisions on your behalf, if you are not able to make them on your own. It is also called a representation agreement or, in Quebec, a mandate, in case of incapacity.
Living will:
A legal arrangement which is responsible for setting out the medical care that you do or do not want in case you are ever unable to state your wishes.
Probate:
It is the legal process of settling the estate of someone who has died.
If you are looking forward to creating a will or need help with estate planning, then visit Prowse Chowne.