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Estate planning is a process by which you set up legally effective arrangements (that meet your specific wishes) if something happens to you or those you care about.
Now, bear in mind that good estate planning is more than just a simple will. Estate planning also typically minimizes potential taxes and fees, and sets up contingency planning to make sure your wishes regarding health care treatment are followed.
On the financial side, a good estate plan coordinates what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event you became disabled or if you die. On the personal side, a good estate plan includes directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you select would do that for you, and know when you would want them to authorize heroic measures and when you would prefer they pull the plug.
No, but if you do not have a will then your assets will be distributed “intestate.” What this means is that your property will be distributed to your “heirs” (usually your spouse and children) by a procedure that each state has created. The term heirs can be different in every state. Each state may also divide up property differently than you would like. Thus it is important to have a valid will.
If a person dies without a Will, he/she will be considered to have died intestate. In this case, property will be distributed by the states laws. Often, the surviving spouse will get half the estate and any children will inherit the other half. If a person dies without a Will and without any trace of any heirs, all property will escheat (be turned over) to the state.
The only time that you can prepare and implement an estate plan is while you are alive and have legal capacity to enter into a contract. If you are unable to manage your own affairs or suffer from some other disability which affects your legal capacity, your estate plan may be effectively challenged by those who assert that you lacked capacity at the time the documents were created, that you were subjected to fraud, coercion or undue influence during the creation and implementation of your plan.
An estate plan consists of one or more documents that set forth instructions. Some documents are used to control health care decisions, others control your property in the event of your incapacity, and still other documents will control the distribution of your property in the event of your death.
As you begin the process caveat emptor (let the buyer beware). There is a lot of information out there; while some of it is very good, some is misleading at best. There are many general overview guides to estate planning available at bookstores. Some are pretty decent, most are awful. If you are planning to do it yourself, be prepared to spend a fair amount of time on this project.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified estate planning lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local estate planning attorney to discuss your specific legal situation.