Despite the term conjuring images of someone out of Downton Abbey with a sprawling mansion and corresponding staff, your “estate” is simply what you own, whether that’s your home, your car, your insurance policies, your pets, your antique spoon collection... all of these assets count as your estate. Without a plan for what to do with these assets, your loved ones will have to decide who gets what, guess at your wishes for your end-of-life care and funeral arrangements, and scramble to pay debts and taxes. Estate planning is peace of mind, for you and your loved ones, so that when the time comes, everything is already taken care of. The house passes to your named beneficiaries, the car is sold, the pet goes to a beloved friend, and that antique spoon collection is donated to a museum — exactly as you wished.
Moreover, estate planning includes documentation for your health and financial welfare in the event of an accident that leaves you unable to make decisions for yourself. Documents like power of attorney and living wills ensure your wishes are followed even when you aren’t capable of voicing them.