An estate plan involves carrying out certain tasks that will serve to manage your asset base if it so happens that you end up incapacitated or deceased. The plan includes assigning assets to heirs and settlement of estate taxes. The majority of estate plans are created with the help of lawyers who specialize in estate law.

Two of the most common estate planning vehicles are wills and living trusts. A will is a document that directs how your assets should be distributed amongst your loved ones. One thing to note about a will is that it does not avoid probate. Therefore, before the assets can be assigned to their rightful beneficiaries, they will still have to go through your state's probate court. While this process varies according to state, it's generally expensive and can also take a few months to complete.

Does your family know everything about your business, assets, titles, and insurance policies? If they don't, they can find it very difficult to track all these things down if you don't leave clear instructions and organized records. This is why you need to have an estate plan in place. With an estate plan, your family will find it easy to locate and organize your information. Apart from that, an estate plan gives you peace that your family will be taken care of in the event of your passing. Failing to have an estate plan can end up with them being left with nothing, as this can have devastating tax consequences.