We Care

Five important steps in estate planning

There are a number of steps in estate planning. These steps can vary, depending on the complexity and goals of the plan, as well as a number of other factors. Here we’ll take a look at five specific steps, perhaps tips, in estate planning.

One step that needs to be taken is to make a summary of all one’s assets and liabilities. This should be the starting point. Assets will be held in different ways, including individually, jointly with right of survivorship, transfer on death or pay on death accounts, and so on. The form of ownership affects how the asset will need to be dealt with. Keeping paperwork associated with these assets together will help heirs easily evaluate what is at stake.

Perhaps one of the most important steps to take in this whole process is to get in contact with the appropriate professionals. These include a financial planner, a tax accountant, and an estate planning attorney. Together these disciplines can help one navigate estate distribution, tax issues and legal concerns.

Deciding who will inherit one’s assets is, for many people, quite difficult. Family feuding over inheritance is quite common, and some feuds can result in legal action that drains an estate. Part of good estate planning is finding ways to minimize potential discord. One way of doing this is to keep everybody in the loop.

Managing one’s assets during one’s lifetime, particularly in the event of incapacity, is part of estate planning as well. Revocable trusts and a durable power of attorney are two avenues to pursue for this purpose.

It is also important to finish what one starts in estate planning. A great plan is only useful if it is implemented. Another important task is periodic updating of one’s estate plan. Life circumstances can and do change over time, and what was useful at one time may not be useful under different circumstances.

Source: Fox Business, “Five Steps for Preparing Your Estate for Inheritance,” July 13, 2012.