Question: I don’t have a lot of money. Do I have an estate?
Answer: Yes. Contrary to popular belief, you don’t have to be a millionaire to have an estate. When many people think of an estate, they picture a mansion on acres of land with lush gardens, stables, staff and everything else the ultra-wealthy might desire. Sure, that may be one definition of an estate, but there another definition that applies to everyone – regardless of wealth.
A person’s estate consists of everything they own when they die. This includes the person’s home, cash, investments, bank accounts, business assets, personal property (jewelry, art, china, furniture, etc.) – even their pets. So, even a person dies with $10 to their name, that $10 makes up the person’s estate. So, everyone has an estate – not just the ultra-wealthy.
Now that you know what an estate is, it is easy to understand the purpose of an estate plan. An estate plan is basically a plan that you make while you’re alive that lays out how you want your estate transferred to others at death. A comprehensive estate plan also includes planning for a what would happen someone becomes ill or incapacitated. For more information on this, see my post called What Is An Estate Plan?