Estate Planning Basics: Tips for strategic preparation

By January 26th, 2024 No Comments

This article appears in the Atlanta Business Chronicle.

Crafting a carefully considered estate plan can ensure that asset distribution aligns with both your intended legacy and your beneficiaries’ needs. Additionally, thoughtful estate planning can create tax and investment efficiencies and help guarantee effective execution.

Before developing your estate plan, it can be beneficial to get a working knowledge of the components of a detailed plan, the different ways assets can be transferred, and some tips on how to get started.

Components of a Detailed Plan

Thoughtful estate planning typically starts with creating a library of records. Here’s a list of some key estate planning documents to develop, gather, and organize:

Last Will and Testament

This document provides guidance and details on an individual’s wishes regarding the distribution of their property and assets after death. The individual publishing the will identifies an executor, who will oversee and manage the estate until its final distribution, including the settlement of any outstanding debts and taxes. A will doesn’t replace agreements related to insurance proceeds, retirement assets, or transfer-on-death investment accounts.

Most states require that the will be witnessed by two individuals and signed by the writer. After death, the will is submitted to the probate court of the county or city where the individual resided. The probate process can be fairly quick or protracted, depending on the complexity of the estate and whether there are legal challenges to the will.

This component of estate planning helps ensure that a person’s wishes are carried out after their passing. A will may be amended during a testator’s lifetime and should be reviewed periodically to make sure it still aligns with the testator’s wishes, ensuring that assets are utilized in a way that aligns with the grantor’s wishes and legacy.


A trust is a legal arrangement that allows a third party, the trustee, to hold assets on behalf of a beneficiary or beneficiaries. They can be arranged in many ways and allow a grantor, or the person creating the trust, to define how and when assets pass to beneficiaries. Trusts can be revocable, meaning the grantor can amend it until their passing, or irrevocable, meaning the grantor cannot amend the trust after its creation. They typically pass outside of probate, saving time, court fees, and potentially reducing estate taxes.

Letter of Intent

This document may accompany a will or trust and is published to the estate executor, trustees, and beneficiaries. The letter provides further detail from the decedent on their philosophy and desires for the estate assets so that their legacy may be understood and carried forward.

Power of Attorney

This document may be used when its publisher, or principal, has become physically or mentally disabled due to physical trauma or aging. It allows an appointed agent to manage the principal’s financial and legal affairs on their behalf. A power of attorney can be either temporary or permanent and revoked upon a principal’s passing.

Advance Directive for Health Care

This document provides detailed guidance to caretakers and medical professionals regarding wishes for health care when someone is unable to communicate for himself or herself. The advance directive may appoint a healthcare agent to coordinate care.

The documents listed and described above work to help transfer assets from decedent to beneficiary. Understanding how they can help you accomplish your goals can also be useful information when developing your estate plan.

Asset Transfers

There are various ways that asset transfers occur from decedent to beneficiary, including designations, jointly held accounts and property, probate, or trusts. Aligning these methods with the rest of your estate plan can help ensure it is executed efficiently and avoids unintended estate tax consequences.
Beneficiary Designation is a method of asset transfer that usually applies to life insurance policies, annuity contracts, retirement accounts, and savings and investment accounts. Primary and secondary beneficiaries may be selected and can be individuals or charities.

Some assets are considered as owned through joint tenancy with rights of survivorship (JTWROS) and passed by title or registration to surviving co-owners. These assets usually include bank and investment accounts, homes and other real estate property, and vehicles or boats. In these cases, at the death of one owner, the assets automatically transfer to the surviving owner(s), providing there are no conflicting provisions in the will or trust.

Probate is the legal method through which an estate executor and the state courts distribute assets using a will as guidance. During probate, a court authenticates the will and authorizes the executor to pay all debts and taxes and distribute any remaining property accordingly, per the instructions provided. If an asset does not pass by law, contract, or trust, they will usually pass to heirs.
Assets that are held in trust are maintained by trustees who hold the assets on behalf of beneficiaries. They are passed based on what the trust agreement specifies and are not typically impacted by the will, do not usually go through probate, and use trust terms to define how assets will be distributed to beneficiaries.

Now that you have some components of a detailed plan and information on different ways assets can be transferred, here are some tips on how to create, implement, and maintain your estate plan.

Tips for Getting Started

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, consider 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.

Draft Documents

The next basic step is to meet with a qualified estate attorney to draft the documents needed to carry out the estate plan. The attorney can help refine goals and decide 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.

Re-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 help ensure that assets are titled and organized so that the estate plan can be administered seamlessly when needed.

Notify Executors, Trustees, and Beneficiaries

Reviewing new documents with individuals selected to be the executor, trustees, guardians, and agents can help them understand the provisions described in the documents for medical care and basic estate administration.

Organize Documents

Keeping a copy of the most recent estate documents in a safe, bank deposit box, or desk is recommended, making sure they are in a waterproof & fire-proof box. The executor, trustees, and agent should know where to find the documents. If desired, give a copy to the primary care doctors, healthcare agents, and other legal representatives.

A good rule of thumb when it comes to estate planning is making it a habit to review your estate plan periodically, especially when life or family changes occur. These events include new marriages, divorces, the arrival of a first child, changes to intent for asset distribution, or when a beneficiary or spouse passes. A financial planner can prompt a review when a new regulation is enacted that could impact the estate plan or basic estate strategy.

If you have assets, you have an estate – even if you have not crafted a plan with the aid of an estate attorney and wealth manager. Estate distribution must be handled at the end of one’s life. For those who pass intestate, meaning they pass without a published will, the state courts determine how to distribute their assets. Creating an estate plan helps avoid leaving these decisions up to the court.

Finally, remember that each situation is unique. Different types of assets, different goals and objectives, and different state laws mean that there is no right way to provide for the distribution of assets. It’s best to seek counsel from financial, legal, and tax professionals when considering what makes sense for your unique situation.

Do you have questions about estate planning or how an estate plan can help maximize your legacy? Contact Vicki Shackley, director of SignatureWOMEN, today!

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