Estate Planning - An ignored concept of financial planning.

A: When it comes to retirement people plan their finances but they fail to look beyond retirement and do their estate planning, which is an important concept of personal finance which has got neglected.

Speaking about estate planning, it is very critical to look at what is estate planning. Estate planning is nothing but a concept of consolidating a person’s wealth, preserving it and managing and finally transferring it to the next generations. Therefore, this is nothing, but an estate planning.

Coming to the point of what somebody should keep in mind when he is doing an estate planning. A person should take three steps, which are very important in the same given chronological order to make sure that the estate planning is holistic and fulfilled in the right fashion. The first step, which is most important, is to draw a balance sheet of assets and liabilities; assets and liabilities, not just from the current assets and the current liabilities also having a projection of what the future is going to be and then arriving at the net asset of an individual.

The second step of estate planning is to understand clearly as what one wants to do with net assets; bucketing them into different allocations.

The third step is the execution of these two in the form of a will and a trust or one of them or both depending on the client’s requirement. Therefore, these are the three basic steps which one needs to be taken care of.