Estate planning includes the process of accumulating, preserving, and distributing assets to achieve the financial goals of people during their lifetime and to provide for heirs according to an estate owner's wishes at death. It also involves protecting yourself in case of incapacity. Most people think of estate planning as the coordination of all your properties (stocks, bonds, cash, real estate, business interests, life insurance, retirement benefits, and other assets) into a total program. It also includes who gets your non-titled property such as photos, paintings, china, silver, and collectibles.
Someone is going to inherit your property, so it seems only sensible to have it distributed according to your wishes and conserved, as much as possible, from estate and inheritance taxes and other costs of estate settlement. However, estate planning is not a one-time event. The three elements for the property side of estate planning are accumulation, preservation, and distribution:
* Accumulation: Estate accumulation objectives involve accumulating assets and net worth during your lifetime by systematically channeling money into savings, insurance, and investment plans.
* Preservation: Estate preservation objectives include protecting your ability to earn an income during your working years and planning to minimize and offset estate shrinkage at your death.
* Distribution: Estate distribution objectives deal with identifying and implementing tools and techniques that will distribute estate assets to your heirs in an advantageous manner that is consistent with your wishes.
These three elements are not age specific: people of every age are likely to have intentions for each. The part of estate planning that most people leave out is taking care of themselves if they become incapacitated. Some people have documents that provide for someone to make healthcare decisions. Having someone to make financial decisions is also important. These do not have to be the same person, but they can be.
You should name more than one person to act in succession in case the first person or people you name cannot or choose not to serve. For more information, visit: "Getting Ready for Estate Planning" (http://www.ces.purdue.edu/estateplanning/) which provides a six-step approach to preparing for after-death planning. The purpose of the Web site is to help people overcome their anxiety about estate planning and to give them information that will enable them to better understand the process. This is not a do-it-yourself site but rather the place to go before you talk to your family or see an attorney.
Fact sheets on estate planning can be found at ( http://www.montana.edu/extensionecon/estateplanning/), or call your local Cooperative Extension office. Additional estate planning information can be found by visiting http://www.extension.org and clicking on "personal finance."
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