Estate planning is the process of arranging for the management and distribution of your assets and responsibilities after your death or if you become incapacitated. An estate plan should accomplish your personal and family goals; ease the handling of your financial and/or legal affairs; and minimize taxes if your estate is large enough to be of concern. The goals of your estate plan can be accomplished through several methods, including:
- Revocable Living Trusts
- Last Will and Testament / Probate
- Lifetime Gifting
- Joint Ownership
- Beneficiary Designations
- Life Estates
Effective planning minimizes or eliminates problems that often arise when people fail to properly coordinate these methods of passing their estate to the desired beneficiaries. For example, a father’s will may state that all assets should be equally divided between his children. However, if the father created a joint account with only one child for convenience, a fight could ensue over whether the account should be put back into the estate and divided among the children or remain with the one child who’s name is on the account.