Estate planning is the process of deciding what happens to your assets after you pass away. An estate is the sum total your entire net worth. Net worth is what you are worth after all debts have been subtracted from your assets. The right advance planning can help make sure that your carefully earned assets are distributed as you see fit. It can make sure that your cherished possessions go exactly where you wish rather than the whims of the government or people you do not know.
Estate planning is an important life decision that should begin once you have completed your education and begun your first job. Your estate planning needs will typically change as you go through life. Most young people just starting out have few if any assets. Consequently, planning the estate will only require a few simple steps. If you have life insurance through your job, make sure your beneficiary is the person you think should receive the money. Other assets can be disposed of with a simple will that you can get for a small fee.
As a person ages, their type of estate planning typically changes quite a bit. At this point proper estate planning is a must, especially if you have a spouse and children. In many places, your spouse is entitled to collect two-thirds of your assets automatically. Your children will divide up the remaining portion equally.
If you wish to change this distribution, you will need to have a will written up. For example, if you wish to specify that your house goes to your children rather than an estranged spouse, you must get make sure this is stated in the will. If you would like to leave certain assets to charity, you must also get this specified in writing.
Proper estate planning should also concentrate on making sure that all tax laws are obeyed as well as asset distribution. In many places, states that are under a certain amount are entirely exempt from any taxes at all. If you have a complicated estate or an estate with much greater assets, it is wise to consult a tax attorney specializing in this field.
You spend a lifetime working to establish certain fiscal goals. Plan properly to make sure that once you pass away, your assets are protected and given in accordance with your deepest wishes.