Often times in this space we take something for granted. We assume that our readers are interested in estate planning, so they must know what an estate plan is. That is our mistake. Many people do not really know what an estate plan is. With this post we hope to make up for that by telling those readers what an estate plan actually is. An estate plan is a collection of legal documents that are created for one of three basic purposes. Let’s look at those purposes.
1) To determine how a person’s property will be distributed after he or she passes away. This is the oldest purpose of estate planning and what is usually thought about when people hear the term. There are many ways that an estate plan can serve this purpose.
2) To determine how a person’s financial and healthcare affairs will be protected if he or she is incapacitated. This is a much newer purpose of estate planning, but it is equally important.
3) To determine who will care for a person’s minor children if the parents pass away. Not all estate plans serve this purpose as not everyone has minor children.
That’s it. An estate plan is a collection of legal documents that serve one of those three purposes.