Asset ProtectionPlanningWealth Transfer Planning


By June 14th, 2024 No Comments
Estate Planning Basics

In this three-part blog series, we answered the questions of why an estate plan is important and what key pieces are necessary to create an effective plan. We learned how assets are transferred to beneficiaries and what key financial and tax implications are important to remember to maximize the effectiveness of the plan.

Now that you have the foundation for creating an estate plan, let’s walk through the steps to put a plan in motion.

  1. Initial planning: Create a list of assets that will be included in the estate. A financial planner can help create a Net Worth Statement for this purpose. While compiling this list, consider desires for heirlooms or specific pieces of property that should be passed to specific beneficiaries or charities. Also, think about the liabilities and liquidity the estate will need during the distribution process. Consider intended beneficiaries and any special circumstances that should be addressed in the estate plan. This is also a good time to think about desires for medical treatment and management of affairs in case of incapacity. Identify loved ones that can serve as executors, guardians, trustees and agents.
  2. Draft documents: The next step is to meet with a qualified estate attorney to draft documents needed to carry out the estate plan. The attorney will be able to help refine goals and make decisions on key issues identified in step one. A financial planner can review the drafts, consider the potential tax impact and potentially identify more efficient strategies for plan implementation. Once finalized, the documents will be executed with the appropriate signatures.
  3. Title assets, fund trusts and review beneficiary designations: Begin implementing the new plan by re-titling assets, funding trusts and updating life insurance and account beneficiaries. A financial planner can assist in making sure that assets are titled and organized so that the estate plan can be administered seamlessly when needed.
  4. Notify appointees: Reviewing new documents with individuals that have been selected to be the executor, trustees, guardians and agents can help them understand the provisions described in the documents for medical care and for estate administration.
  5. Put documents in the right places: Last Will and Testament, Trust documents and Power of Attorney: Keep a copy of the latest estate documents in a safe, bank deposit box or desk at home, making sure that the documents are in a water-proof & fire-proof box. The executor, trustees and agent should know where to find the documents. Advance Directive for Healthcare: The advance directive should also be kept in a safe or desk, in a water-proof, fire-proof box, as well as, a copy given to the primary care doctors. The healthcare agent should have his or her own copy, too.

It is important to review your estate plan periodically, especially when life changes and family changes occur. These events include: new marriages, divorces, arrival of a first child, changes to intent for asset distribution, or a beneficiary or spouse has passed. A financial planner will be able to prompt a review when new regulation is enacted that could impact the estate plan or estate strategy.

If you have questions about how an estate plan can maximize your legacy efforts for loved ones, please reach out to our team at ­­­­­­­­­­­­

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