3. Planning: Where will your possessions go and who will take care of things.
The term “estate planning” can be incredibly misleading. It covers a vast array of issues and planning techniques that apply to all those issues. Most people assume it involves massive sums of money, the truth is, at its most basic level, estate planning is simply about making wishes known in a way recognized by the law. The term “estate” really refers to anything you own, and not just that stash of hundred-dollar bills hidden in your mattress.
Think about it for a second- bank accounts, retirement accounts, insurance, furniture, jewelry, vehicles, clothing, housing, etc.- everyone has possessions, and they need to go somewhere when you die. In the absence of a valid plan, these things all pass either a) according to how they are titled (in the case of homes, some vehicles, certain benefits and insurance proceeds) or b) according to state laws of intestacy. Intestacy statutes attempt to mirror how the average person would likely wish to pass his or her belongings, however; everyone is obviously unique and individual considerations may point to a different scheme. Property passing by intestacy simply may not go where you want it to go. Drafting and executing a valid plan is an easy way to set forth who you would like to receive your things in the event you die. After all, it’s your stuff. The choice should be up to you, and not the state. Moreover, you can choose who will take care of your finances and health if you are incapacitated, who will administer your plan after you pass, and who will be responsible for your children.