What is the Creation Phase in Estate Planning?

2009-01-06T08:39:00.001-08:00

Estate planning is the process of accumulating and disposing wealth before death of an individual or estate owner, including married couples. It's aim is to maximize the wealth of the estate owner. The most important goal of estate planning is to make sure that the greatest amount of the estate passes to the estate owner's intended beneficiaries while paying the least amount of taxes. In this article, we will discuss the creation phase in estate planning.

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I. Definition
Creation phase is defined as a length of time that you start to follow your personal financial planning to save and invest.

II. Wealth creation
a) When to start
Most people think wealth creation is only for people who have a sizable income or just started a family. In fact, wealth creation can start as young as you want. Some parents try to educate their children on how to invest by giving them a few shares of some blue chip companies. Some people may start as soon as they have a job. There a lot of different stories about how wealth was created. In fact wealth creation has to be followed carefully on financial planning that you have worked through them with your financial planner.

b) Purchase term life insurance
The phase of wealth creation also includes how to protect your loved one in case of sudden death. Since most people in this phase have little to invest or just to save, it is prudent to purchase a term life insurance. Term life insurance is the most affordable life insurance for people who would like to protect their family because the premium is the lowest amongst all life insurance.

c) Pay yourself first
One of the financial plannings is to pay yourself 10% first then plan for the rest later.

d) Buy what you need and only some what you want
Many people can not see the difference of things that you need and things that you want. In fact, things that you need are thing you can not live without it, while things that you want are things you CAN live without. Planning a vacations are things you want. You can delay it or cancel it without effecting your daily living. Buying food are thing you need, don't tell me that you live without eating.

e) Avoid unnecessary bank charges and use your credit card wisely
Find a bank that allows you to write your check and make your payment free and pay up your credit card payment every month. Your credit card has a nannual interest rate from 10% to 24.99%.

f) Invest wisely without getting in emotional buying and selling by following your personal planning closely and have your financial planner review them every year.

I hope this information will help. If you need more information or insurance advice, please follow my article series of the above subject at my home page at:
http://medicaladvisorjournals.blogspot.com
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Estate Planning 17

What is the Creation Phase in Estate Planning?