Estate planning is a plan which works after the death or before the death of a person. Estate means your whole –property or your assets like cash, plots, house and saving accounts, insurance, jewellery households etc. It has several objectives and goals like guardians for minor children if any or etc.
Some important tools for estate planning include:
1) Before death
Gifts
Partition
Trust
Power of attorney
2) After death
Succession
For estate planning the person must be of sound mind and at least 18 years old and it can be done only when person is free from emotional stress and also in a normal condition. An estate plan aims to preserve the maximum amount of wealth possible for beneficiaries and flexibility for the individual prior to his death.
Steps for planning:
Establishment of relations
Collection of information
Determination of information
Planning for transfer
Implementation of plans
Review of plans
Objectives of estate planning:
For transfer of property to parents, children, friends, etc
Planning in case of disabilities like mentally sick,
Due to the lack of maturity and discretion in minor persons (below 18 years) used planning to avoid misuse that may happen
For selection of trustee and guardian for business or for family
Limitations of estate planning:
It creates misunderstanding among family members
It is time consuming process
Goals of persons may not be fulfilled properly
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