Do you need an estate plan?

Estate plan is a collection of documents that clearly details how you want your investments and other assets to be managed both during the course of your life and after your demise. Most of us believe that an estate plan is only for those who have large properties or whose investments run in crore of rupees. Nonetheless, estate planning should be done by everyone. Some believe estate planning is equivalent to writing a will. Estate planning is, however, more than just the proper disposal of your assets. It can help you meet your financial goals and objectives, with a holistic approach that includes tax, business and medical planning.

The basic objective of an estate plan is to ensure that there is no ambiguity with your estate distribution. This helps you maximize your estate’s value through effective tax planning and other financial tools

What your Estate includes?

Estate includes everything that you own whether in your name or jointly owned by any other individual including your spouse, parent or business partner. Some of the most common things included in your estate are amounts in your savings account, inheritance funds, your house or land or any other property you own. Your estate even includes car, furniture etc. From these assets, all the liabilities that you do owe such as home loan, car loan etc, is deducted and finally what you get is your estate.

What your estate planning includes?

The most common elements of estate planning are Will, Trust and Probates. Will is the most common estate planning device. The Will lists down the name of beneficiaries of individual’s property after his death. Trust and its variants are used to manage assets of the individual during the estate holder’s lifetime and after their death. Probate is a public process supervised by the court where the property is distributed to beneficiaries by an executor, after the estate holder’s demise.

Why you should go for estate planning

There are primarily two factors for which you should go for estate planning. The first is it protects you from outside influences, creditor problems or any other issue. The next is it prevents family dispute and costly legal expenses if any arises due to the dispute in the distribution of assets after your demise. Therefore, it is always advisable to go for estate planning as part of your overall financial planning.