The Six-Step Estate Plan

estate plan
Building a Well-Crafted Plan for Your Assets Ensures Your Wishes Will Be Met

Through your lifetime of hard work, you’re likely to accumulate some wealth, assets, and family treasures. Have you given much thought to what will happen to them when you die or become incapacitated? This is the purpose of an estate plan.

Although it can be an emotionally taxing scenario to consider, none of us will live forever. That’s why it’s so important to have an estate plan in place so that you can legally specify your wishes and ensure they will be carried out. A well-crafted estate plan can also help to head-off potential family disputes, as well as keep details about your financial affairs private.

If you don’t have an estate plan in place yet, you should consider working with a qualified attorney or financial planner. Together, you’ll walk through the following six steps to create a plan that suits your needs:

Step 1: Make a List of Your Assets and Debts

Start by creating an inventory of every asset you own. This should include account numbers and contact information for financial institutions, as well as names and numbers of your trusted advisors. Next, do the same with any debts you owe. All of this summary information on what you own and what you owe should be kept in a secure location, along with copies of any important documents related to them. You should also provide a copy to the executor of your will. This summary could be on paper, though it is best kept in a digital file also.

Step 2: Plan for any Contingency

Of course, you may be lucky enough to live to a ripe old age, but you need to consider what would happen to all of your assets – including any property – if you were to pass away today. You should also consider a plan for what happens if you become incapacitated so that your family can carry on your affairs without a visit to the family court. Keep in mind that you may also need to document a strategy for providing income if you become disabled, or for paying medical expenses for the care you may need.

Step 3: Provide for Your Loved Ones

For many people, the primary goal of estate planning is to provide for their loved ones, especially children and grandchildren. Your estate plan can include such provisions, including plans for guardianship of your children if you and your spouse pass away before they reach age 18. Note that, if you wish to provide financial security for loved ones with special needs, you’ll have to work with your financial advisor to carefully avoid jeopardizing their existing eligibility for government benefits.

SEE ALSO: Six Steps to Finding a Financial Advisor You Can Trust

Step 4: Protect Yourself

One of the key components of a good estate plan is that it protects your assets for your heirs, while also minimizing taxes and expenses. This might mean special planning for transferring or disposing of unique assets like a family business, investment properties, or stock. It’s common to utilize tools such as permanent life insurance and trusts to protect assets and ensure your future financial goals can be met.

Step 5: Get the Details Down

If you have particular wishes about how you’d like certain assets to be distributed – either to meet financial or personal goals – you’ve got to get it in writing. It’s only through legal documentation that you can ensure all the specifics of your wishes will be met. Don’t neglect to include items like designated beneficiaries for life insurance policies and retirement accounts, and to ensure that titles of material assets are named properly (think vehicles and property). You’ll want to keep an updated will to dispose of your assets, a living will that reflects your wishes for end-of-life and designated powers of attorney for both financial matters and healthcare decisions.

SEE ALSO: How to Talk More Easily About Death and Dying

Step 6: Designate Fiduciaries

Even a perfectly crafted estate plan will be flawed if you neglect to choose fiduciaries who will execute your plans. Fiduciaries are often family members or trusted friends, though they may also be hired professionals like attorneys or bankers. You should appoint an executor of your will, a trustee for your assets, a legal guardian for dependents, and a power of attorney. Not only do you need to choose these individuals, you also need to ensure each is aware of your wishes and that they agree to act in a fiduciary capacity for you. If they do, they should be made aware of where any pertinent estate planning documents can be found.

An Estate Plan is Essential

Whether you’re in the initial stages of growing your wealth or you’ve accumulated a great deal over your lifetime, creating an estate plan – and keeping it up to date – is essential in helping you preserve and manage your assets for your loved ones. If you’d like professional assistance, a financial advisor can be an excellent resource.

At Andersen Wealth Management, helping you meet your financial needs – now and into the future – is our first priority. Contact us today to begin a conversation about building your ideal estate plan.