Have you ever wondered what exactly is an “estate”?
A Forbes Magazine article put this question into perspective, by showing the misconceptions surrounding the word “estate” and the need for estate planning.
The common question that many might have is why they would need estate planning if they don’t have an actual estate.
While the term “estate” conjures up images of red brick mansions and wrought-iron gates, an estate for legal planning purposes actually refers to everything you own when you pass away.
It’s as simple as that. Or almost.
- Real estate
- Bank accounts
- Life insurance policies
- Stocks or bonds
So why plan your estate, then?
You need to have a basic plan for where your estate goes after you die. And at the most basic level, a will is a cornerstone of an estate plan.
The first and most important reason to plan your estate is that if you die without having a proper will, your estate will pass through laws know as intestacy laws. This means that instead of you delegating who gets the items in your estate, New York law will decide for you.
To get a better idea of how your property might pass through New York intestacy laws, check out this intestacy calculator.
Going back to the term "estate," the other misconception surrounding the word "estate" is that many people are unaware of what's actually in their estate. While you might think you have title to a certain piece of property, perhaps you need to take a closer look at the deed. Some property is owned in joint tenancy, which means that you won't be able to pass it along in your will, it automatically goes to the person who is your "joint tenant." Other property may be owned with a life interest or in a long term ground lease.
At the end of the day, it all comes down to this: You don't need a fancy mansion to need an estate plan.