What is an estate? Don’t only rich people have estates? What does this mean in the context of estate planning?
According to Black’s Law Dictionary, “estate” refers to “the property (real or personal) in which one has a right or interest.”
In other words, your estate consists of whatever you own. One person’s estate could consist of a mansion, a Ferrari, and a billion dollars. Another person’s estate could consist of a only van down by the river.
This concept is important because, after you pass away, you still technically have an estate. That estate is what must be managed after you pass away. Funeral expenses and other remaining debts will be paid from your estate’s assets. And your property will be distributed from your estate to your beneficiaries (usually your family). All of the details will be managed according to the terms of your estate plan.
With this context in place, you can see that an “estate plan” is simply the plan that you make, during life, dictating how your estate’s affairs will be managed after you pass away. Whether your estate is large or small, a proper estate plan can save your family a lot of stress, heartache, and money.
There are a variety of options and strategies to consider as you create an estate plan for your family. To learn about some of the basics, please feel welcome to read some of our other articles. “Estate Planning Basics” and “What should I think about?” are both a good place to start your research.