Get Started With Basic Estate Planning

Estate planning is all about making decisions and being organized.

10 Estate Planning Success Tips The first step in estate planning involves gathering the necessary resources and information, a relatively simple process. Here are a few things to be aware of and a list of items to consider when planning your estate.

Make and execute a will. A will is a document with your directions about how, when and where you want your assets to go after your death. Your will can also include special instructions regarding your personal desires. It can also leave instructions for the care and guardianship of minor children. A testamentary will, or a will that’s executed in the presence of witnesses is most likely to be carried out after you die. 1

Create a revocable living trust. It may make sense to consider the use of a revocable living trust if you own real estate or other large assets. Trusts can help avoid the need of probate and they can reduce costs. Revocable living trusts can be changed as circumstances in your life change. A trustee can be appointed to manage your estate according to your wishes and asset transfer can be done privately after your passing.2

Get advance directives or a living will. These directives will allow your heirs and caretakers to fully understand your wishes in regard to end of life care. The term “living will” is often used in place of advance directive. Be sure to discuss your wishes with family members so that they fully understand your wishes in terms of medical care should you be in a vegetative state and unable to make decisions for yourself. 3

If possible, avoid probate. Name a beneficiary for IRAs and other retirement accounts, bank accounts, and stock brokerage accounts, life insurance, and annuities to avoid probate.4

Calculate estate taxes and probate costs. Some estates over $5 million may be liable for estate taxes (death taxes). Account for additional costs in planning for the transfer of assets from your estate. Make certain you fully understand the potential liabilities. Life insurance or other liquid funds that are not tied up in probate can be used to provide liquid funds to cover probate costs.6

Funeral costs: Many people pre-pay estate taxes and leave behind specific instruction for a funeral service. These instructions are often handwritten and a nice place to keep them is with your will. Make sure family members are aware of where to find funeral service instructions.

7. If you have minor children, consider naming one guardian for your minor children and a separate guardian for the property you’ve left to support them. The best guardian for your children may not be the most effective money manager you know. Just be aware that the person you’ve chosen as guardian of your children, can be a different person than the guardian that manages your children’s property.1

8. Estate planning for your spouse or other sole survivor scenarios. If your net worth is high enough, your estate may be subject to taxes. A simple estate plan can save some individuals hundreds of thousands of dollars in estate taxes. 2,7

Store documents in a safe place. Your health directives and your power of attorney should be kept safe and trusted friends or children should know their location. Do not store these items in a safety deposit box at a bank as it can be difficult for beneficiaries to gain access to it. A better choice would be to have a trusted attorney hold important documents or to store them in a fireproof safe that’s built into the structure of your home. In some states, the county clerk may store a will for a nominal fee. Other items to be kept safe include deeds, brokerage account information, IRA information, funeral plans, general financial information and tax returns.6

Like all important life decisions, always make certain you fully understand how things work and what affect estate planning decisions can make on your heirs and beneficiaries. Seek professional advice in order to distribute assets according to your wishes after your passing.


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