Estate Planning - A Short Glossary

Drafting a will and planning for your estate is one of the most important decisions that you will make in your life. When you write a will, you are deciding how everything that you own will be passed on and who it will pass to in the event of your death. While some people avoid thinking about the future and the prospect of dying, estate planning is a smart decision that allows you to control and protect your estate even after you are gone.

When you decide to draft a will or create a trust fund, you will likely be bombarded with many legal terms that you may not be familiar with. This legal jargon can make estate planning seem overwhelming. On the contrary, it is a fairly straightforward process. Just knowing a few key terms and how they apply to you can clarify the estate planning process.

Estate: Your estate is all of the things that you own and owe, including all assets and liabilities.

Assets: Your assets are all of the things that you own, including property such as land, a house, a car, jewelry, furniture, heirlooms, and money in the bank. Assets also include copyrights, trademarks, and patents which are not physical things but ownership rights that you possess.

Liabilities: All of the things that you owe, such as loan, mortgage, and credit card debt.

Testator: A person who drafts a will.

Will: A will is a declaration of what you wish to happen to your estate once you pass away. It includes the names of all of the beneficiaries to whom you wish to pass on your property.

Beneficiaries: The people who you list in your will that will benefit from your estate.

Trust fund: An entity that you create to safeguard some of your assets in the interest of a beneficiary or beneficiaries.

Trustee: The person that you designate to manage a trust fund on your behalf and in the best interests of the beneficiary.

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Finance - One Reason to Start Planning Your Estate Today

To begin, a quick overview of estate planning. In general, estate planning is the process of determining the way in which one's assets will be distributed after death. Because applicable state and federal laws must take a very broad view of the topic and offer "one-size-fits-all" solutions, they frequently do not reflect the wishes of the deceased. However, if no record of the deceased's wishes can be found, his or her property will be handled in accordance with state intestacy laws, often to the detriment of potential heirs.

In a nutshell - estate planning is important. Experts agree that every man and woman needs a valid plan for the handling of their assets after death. Unfortunately, despite media coverage of the issue, many people still choose to put off estate planning until the last minute - and then are dismayed by the amount of work before them.

For anyone who needs a good reason to start the estate planning process now, consider the purpose of a similar process - financial planning. The goal of a financial planner is to help his client diversify, grow, and protect her assets. By putting a good financial plan into action early on, the client reduces the amount of money she must contribute every month, but will still receive a large nest egg in time for a comfortable retirement.

The same principle applies to estate planning. In fact, the way in which you intend to distribute your assets after death will influence the way in which you choose to handle them while you are alive. The provisions of your will could have profound effects on the types of trust in which you place your funds, for example.

Three reasons to start estate planning early:

- Reduce the burden of time. Designing a good estate plan is a long, time-consuming, ongoing process. Starting early reduces the amount of time you have to commit at once. Think of it like studying for an important test - doing a little bit of studying every day is less stressful than cramming everything into a few hours the night before.

- Time to talk with your loved ones. Probate disputes are some of the most disruptive and harmful processes a family can face. Discussing your wishes with your loved ones can head off such disputes before they happen.

- Cross-influence. As mentioned above, estate planning influences financial planning, and vice versa. If you start one early, the other should start early as well.

For more information, visit the website of Austin probate lawyers Slater & Kennon, LLP at http://www.probatelawyeraustin.com.

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