What is an Estate?
Estate refers to a person’s possessions especially at the person’s death. This include, his money, houses, investments, every of his properties.
What is estate plan?
Planning ones estate involves making preparation and arrangements on how you want your estate to be distributed among your heirs in the case of death. An estate plan is made while you are still of sound mind and you are still capable of making rational decisions regarding your estate.
Reasons why an estate plan is important
- The right persons get to benefit from your estate: At the event of a person’s death, his estate plan will give directives on how his properties should be distributed among his heirs. His assets will be given exactly to the persons he wants to get them. The court won’t have to decide how the person’s property will be shared. But in a case whereby the deceased does not have an estate plan, the court will have to share his estate. This might make the wrong people get the properties he might not have wanted them to get.
- Estate plan saves your family from unnecessary stress after your death: The family of a deceased could go through a lot of stress at the death of their loved one. These stress goes from funeral arrangement, settling of debts, settling of taxes, distribution of assets, etc. but, the deceased while still alive and sound in mind can decide to plan his estate. This will help save his family these stress because; his estate will make provisional arrangement to cover these things.
In his estate, he specifies how he wants his funeral to be done. He might as well decide to set aside separate trust or fund for his funeral. In his estate he makes provision on how he wants to settle his creditors, taxes, bills etc. Also, he’s estate specifies how his estate should be distributed among his heirs. This will help to prevent tension among family members.
- Make plans ahead in case of an event of incapacitation: In life the only moment one can be sure or certain about is now. The next moment can never be predicted. This is why it is very crucial to make plans ahead incase the unexpected happens. We don’t pray for bad things to happen but, it is quite certain that anything can happen at any time. In the case of an incapacitation, you could lose the ability or capacity of making certain decisions for yourself.
Such decisions might include medical decisions, financial decisions, decisions regarding your general wellbeing etc. Now that you are well and capable of making these decisions for yourself, is the right time to do so. In the event of an incapacitation, your estate plan will state the person whom you want to be calling the shots concerning your health decisions. It makes known your choices of medical treatments, what pattern or type of medical care you wouldn’t want. Your estate plan will also state the person who will be in charge of your finance and making financial decisions on your behalf.
- Estate plan gives you the chance to help others who are not your immediate heir: In the event of a person dying without an estate plan, the person’s estate will be distributed by the court to the person’s heir. In this case all of the person’s estate goes to his family members or children. If the deceased have an estate plan, he could state specifically if he wants part of his estate to be given to charity.
He would have the chance to specify whom the charity donation should be given to and how much should be given to the person. He could decide to make donations to an orphanage home, a home of disabled persons etc. he could also decide to give part of his estate to a distant relative who was dear to him while he was alive. This relative of he’s might not have gotten a part in his inheritance if the court were to distribute his estate.
- Making provision for a business: If you would want your current business to continue after your death, it will be stated in your estate plan. It will also be stated how you would want for it to run.
Even with these few stated advantages, it is glaring the usefulness of an estate plan.
