What comes to your mind when I say “estate”? A large piece of land for construction of a building? A huge farm? What if I say that everything you own is an estate, such as home, vehicle, investments, insurance etc?
An estate is essentially your items till death do you part. When you leave for your heavenly abode, these material possessions belong to other people. Hence, you would definitely want to decide WHO should own WHAT. You want to decide who should what. You have the power to decide who should inherit your material possessions.
At that time, you would prefer writing down a will where you mention clearly about your successor and how much he/she can inherit. Naturally, you want this to happen legally and with no hefty charges.
When some of us were kids, we had this misconception that people died in chronological order, the elders die first and the younger generation dies next. Sadly, this is not the reality. We don’t know who will outlive whom.
Introduction of Estate Planning:
Estate planning is the process of anticipating and arranging for managing and disposing of the property of a man after his death, prepared by the deceased person prior to demise. The dead person would have named an heir or a set of heirs who will inherit his property. Estate planning includes planning for incapacity. This is where you transfer your assets to a named heir/s after your demise.
Concept of a will:
A will is a legal document that instructs how your assets and property must be handled after your demise. An individual expresses his wishes as to who inherits what and where and when.
What happens in the absence of a will?
Kapil was a man fairly in his seventies. He died all of a sudden without any plan or will. Now, his adopted son and his two sons began fighting. Finally, the court ruled that the property is transferred to the birth sons and nothing be given to the adopted son. In reality, the birth sons were drunken addicts and Kapil never trusted them with money matters so he wanted his adopted son to inherit all his property. But he failed to make a will. This resulted in money going to the hands of which he didn’t want his fortune to go to.
In another city lived another person with the same name, Kapil. He had two sons. Early in time, he created a will where he clearly mentioned which son gets what from his estates/properties. After his death, the property was divided as per his wish and everyone was contented.
However, keeping a will isn’t enough today. If you keep a will and nothing else, the court decided when your heir/s will receive what you passed down to him. This will cost your family lots of money for court. Your heirs might get their wealth (inherited) but will also lose money and time to unwanted costly procedures at court. To avoid such circumstances, you will need to establish a trust and not just write down a will.
What is a trust all about?
A trust is a fiduciary relationship where a trustor provides the trustee the right to hold title to property or assets for the benefit of the beneficiary. Trusts provide legal protection for the trustors assets.
A trust ensures you to legally transfer your property to your heir/s during your lifetime so that the heir/s receives it upon your death. No unnecessary costs and no waste of time in running from post to pillar. No court is involved since the trustee will distribute your assets immediately among your heirs upon your death.
These are some things you must know about estate planning.
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