What is "Estate Planning?"

What is "Estate Planning?"

- Authored by: Michael L. Rutkowski

It has been said that there are only two guarantees in life, the first is death and the second is taxes.  So let’s talk about the former.  When it comes to death, it is only a question of “when,” and not “if,” a person will pass away.  When this happens, regardless of how big or small, a person has an "estate."  The process of making plans for what happens to those things that an individual has acquired during their lifetime is referred to as "Estate Planning."

Estate Planning can range from very simple to extremely complex.  However, the key issues that an individual must consistently consider are as follows:

-       Who do you want to receive something of yours when you are gone?

-       When do you want them to receive it?

-       What happens if you are disabled or incapacitated before you pass away?

-       How do you accomplish your goals with the least amount of taxes, legal fees, and court costs?

So how should the above issues be addressed?  From an attorney’s perspective, a comprehensive estate plan is the answer.  The majority of plans consist of four separate documents: (1) Will, (2) Trust, (3) Durable Power of Attorney, and (4) Patient Advocate Designation (Healthcare Power of Attorney).  We will be covering each of these documents in more detail in future blog posts.

An important concept to remember as we explore these topics is that estate planning is a process, not an event.  It consists of an ever evolving set of documents that must transform with you as life brings you change.