Estate Planning Process – Legal & Financial Decisions

Introduction

Estate planning is not a one-time event (writing a Will) but a process. It ensures your hard-earned legacy survives you.

Step 1: Identification of Assets (The Inventory)

• Action: List down everything (as discussed in the previous chapter).
• Detail: Include policy numbers, bank account numbers, and exact location of property deeds.
• Valuation: Estimate crucial current value.

Step 2: Identification of Beneficiaries (The Who)

• Who gets what?: Decide distribution.
  • Wife: House + 50% Cash.
  • Son: 25% Cash.
  • Daughter: 25% Cash.
• Contingency: What if the beneficiary dies before you? (Name a secondary beneficiary).
• Special Needs: If a child is disabled, you may need a Trust instead of direct cash.

Step 3: Selection of Executor (The Manager)

• Definition: An Executor is the person named in the Will who is responsible for carrying out your instructions.
• Duties:
  • Collect assets.
  • Pay debts/taxes.
  • Distribute remainder to heirs.
• Choice: Choose someone younger, trustworthy, and financially literate. Can be a family member or a professional (Lawyer).

Step 4: Formulation of Tools (The How)

Choose the legal instrument:

1. Will: The most common and simple tool.
2. Trust: For complex needs / minor children.
3. Power of Attorney (PoA): For managing assets while you are alive but incapacitated (e.g., Coma).
4. Joint Ownership: Adding spouse as "Joint holder" with "Either or Survivor" mode.

Step 5: Drafting & Review (The Execution)

• Drafting: Write the Will. (Lawyer recommended but not mandatory).
• Witnessing: Must be signed by the Testator (You) and Two Witnesses.
  • Medical Certificate: A doctor's note saying you are of sound mind adds validity.
• Registration: Optional but Recommended to avoid fraud.

The Role of Trust in Estate Planning

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Summary

1. Inventory: Know what you own.
2. Executor: The captain of the ship after you leave. Choose wisely.
3. Beneficiaries: Be clear to avoid fighting.
4. Update: Marriage, Divorce, Birth – update the Will (Codicil).

Quiz Time! 🎯

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Next Chapter: Common Excuses for Not Writing a Will! 🙈