In layman’s term, an estate is assets left behind by someone upon death. It includes your home, your car, your bank accounts, your EPF account, your investment in stocks and unit trust, and any smaller assets you have to your name. It also includes intellectual properties such as rights to a song you wrote, or even your social media accounts. However, contrary to common belief, your estate is not automatically inherited by your loved ones.
Before your loved ones can receive your estate, your estate will need to take care of your outstanding housing loans, car loans, and other major debts before your beneficiaries can get what you have left behind.
When people talk about estate planning, they often refer to writing a will and how to distribute their wealth after they pass away. However, an estate plan is more than that. It is a process of ensuring your estate is preserved and passed on to your beneficiaries efficiently and cost effectively. It goes beyond distributions, and involves planning to take care of your dependents if they are still minors or incompetent to act.