Planning Can Be Described as the Process

¶ … planning can be described as the process through which a person or family organizes to reassign assets in expectation of death. This process is geared towards safeguarding the maximum amount of wealth possible for the identified beneficiaries and elasticity for the person before death. During the process of developing an estate plan, one of the main concerns for drafters of the plan is state and federal tax legislations. In addition to considering federal and state law, the process of drafting an estate plan includes several people such as the family, other relevant individuals, and selected charitable organizations ("Do I Need Estate Planning?" par, 1). Furthermore, estate planning process involves the individual's property or assets and their varying ownership forms and titles. Actually, some of the most common tools used in the process of estate planning include trusts, wills, power of attorney, and estates.

While estate planning is used to address a person's future needs if he/she becomes unable to care for him/her self, it has commonly been mistaken that it only involves the writing of a will. Even though a will is part of estate planning, an individual will need additional documents in order to fully address the needs of the process. Actually, this process can involve several elements in addition to those mentioned previously such as tax, medical, financial, and business planning.

In relation to estate planning, an estate is considered as the total property, personal and real, that is owned by a person before distributing it either through a will or trust ("Estate Planning," par, 2). While real property is considered as real estate, personal property includes all other items like bank accounts, cars, and household items. During the process of estate planning, an individual distributes both the personal and real property to his/her heirs. On the other hand, wills and trusts are the common means through which a person's wealth is distributed. As compared to wills, trusts have the advantage of avoiding probate, which is a prolonged and expensive legal process that supervises the distribution of assets. Estate planning process may sometime involve the use of inter-vivos gifts in order to lessen taxes. These gifts help in lessening taxes since they are made before the death of the person or donor.

Who Needs Estate Planning?

The process of estate planning is needed by every individual regardless of whether their estate is small or large. According to reports by experts, every individual should draft an estate plan whether they own a home or have children in order to ensure their assets are distributed based on their choices (Fuscaldo par, 1). Wealth advisors state that the most common mistake people make is the failure to draft an estate plan of whatever kind. They argue that it's never too early to have a basic will or estate plan even if a person does not have many assets.

As part of their initiative to promote the development of an estate plan by every individual, these advisors have constantly stated that such a plan should be drafted and adjusted after a major life event such as marriage takes place. The process of drafting an estate plan does not necessarily have to cost a fortune because there are various online resources that can help an individual through the process. Generally a simple estate plan costs approximately $700 while complicated ones can cost thousands of dollars.