What is estate planning?

When someone passes away, his or her property must somehow pass to another person.  In the United States, any competent adult has the right to choose the manner in which his or her assets are distributed after their death.  (The main exception to this general rule involves what is called a spousal right of election which disallows the complete disinheritance of a spouse in most states.)

A proper estate plan also involves strategies to minimize potential estate taxes and settlement costs as well as to coordinate what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event of death or disability.  

On the personal side, a good estate plan should include directions to carry out your wishes regarding health care matters, so  if you ever are unable to give the directions yourself, someone you know and trust would do that for you, and know when you would want them to authorize extraordinary measures and when you would prefer they not try to prolong life.