What does estate planning involve?

Estate planning involves preparing for the distribution of assets after death, which includes making decisions about how one's property, finances, and personal belongings will be handled and distributed according to their wishes. This process often involves drafting legal documents such as wills and trusts, appointing executors or trustees, and considering tax implications. The goal of estate planning is to ensure that your assets are distributed according to your preferences and to minimize complications for your heirs, which makes it a crucial aspect of personal finance for individuals at any stage of life.

The other options, while important aspects of personal finance, do not relate directly to estate planning. Creating a budget, choosing retirement investments, and managing daily transactions are ongoing financial management tasks that focus on current and future financial health rather than planning for the transfer of assets after one’s passing.