What is the purpose of an estate plan?

The purpose of an estate plan primarily revolves around determining how a person's assets will be distributed after their death. An estate plan encompasses a comprehensive strategy that outlines an individual's wishes regarding the management and allocation of their assets, which may include property, investments, and personal belongings. This planning is crucial for ensuring that the individual's desires are honored, reducing potential conflicts among beneficiaries, and providing clarity to the individuals responsible for executing the estate.

Additionally, it typically involves tools such as wills, trusts, and beneficiary designations, which can help manage assets during the individual's lifetime and specify directions for distribution once they pass away. Thus, the correct understanding of an estate plan is to establish clear guidelines for the disposition of assets, reflecting the person's values and intentions.