Estate Planning Basics

By John McDermott

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An estate plan is the organization of your financial affairs for their control and utilization in the absence of your ability to handle them yourself, and for the final disposition of your assets upon your death. An estate plan might also include tax planning to reduce income tax and death taxes that might be imposed on you, your estate and your heirs. Additionally, your estate plan might address special needs and considerations of you and your family.

Everyone has an estate plan. The question is, did you plan your estate intentionally, or by default? You have the right and the opportunity to direct your estate plan. But, if you fail to plan your estate, the laws of each state, and, to some extent, federal law, provide a plan for you. The laws are necessary to protect your assets while you are living from theft or misappropriation, and, upon your death to assure the orderly passage of your property to your family. They are based on social customs and norms. While the laws are a good default plan for purposes of our society in general, their “one size fits all” formula is not likely to be the best for you and your family. By taking the time to purposefully consider and plan your estate, you will be able to best secure the use of your finances for your benefit during all phases of your life, and provide for the transfer of your assets upon your death in the manner that best serves your desires and the needs of your family.

You have an estate plan. If you did not plan it, do you know what your estate plan is?