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A Simple Estate Plan?

| September 09, 2019
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Okay. So, discussing your own mortality is not usually a hot topic for the dinner table, but maybe is should be. Estate planning is not just for the wealthy.  If you own any kind of physical property –a home, business, savings or investments, retirement plan, etc. –you need an estate plan.  If you do not have one, the state’s intestacy laws could distribute your assets. Yes…even to that bizarre, out-of-work son in-law if that’s what the state decides. Moreover, without proper planning, your estate could be subject to the top tax rate of 40%.

More bad news: estate plans are not one size fits all. Each individual’s wealth, property, feelings and family dynamics are different. The good news is that this process can be fairly simple with the right information at hand.

First, take a moment to first consider what is important to you and leave the technicalities out of it.

  • “What are your biggest concerns when it comes to your estate?”
  • “What do you want to do with your assets when you die?”
  • “Do you have children, parents or siblings with special needs or considerations? If yes, what are they?”
  • “Think about each of your children. How would you like them to receive the assets?”
  • “Think about each of your grandchildren. How would you like them to receive the assets?”
  • “Is there anyone else you would like to include in your estate? If yes, how?”
  • “Who would you like to be the guardian of your children? Second guardian?”
  • “Do you have any continuing obligations under a divorce decree or property settlement?”
  • “Do you have any organizations or charities you want to remember in your estate plan?”
  • “What other plans would you like to make for your estate?”
  • “Who would you like to be the executor of your estate? First and second executors?”

Second, write down your physical property, ownership, titling and value. This is not only important for estate tax considerations, but for detailing how each piece of property is bequeathed and to whom. Because the questions for each piece of property are unique, I strongly encourage you to use an estate planning fact finder.

Next, discuss all of this with your Life Consultant. He/She can help complete the foundation of your plan by asking the devil’s advocate questions - the “What if…” questions you might not have considered.  For example: Would it be okay if your spouse remarried after your death and the new spouse lived in your home? Would it still be okay if he/she lived there after your spouse passed away?  Life Planning is about the questions you do not know to ask that need to be answered.

Now the easy part. Your Life Consultant can walk you through the 5 steps of estate planning utilizing his/her knowledge of investments, taxes, insurance and estate planning, as well as the resources and services of your tax attorney, estate planning attorney, and CPA or accountant as necessary.

  1. The Basics –This step is simply putting your wishes in writing, whether it is a simple will, a living trust and/or a trust created by the will.
  2. The Taxes –This step involves putting your entire estate, the “What ifs?” and the current and future tax laws in perspective. How do you need to title your assets? Do you need additional trusts or a Family Limited Partnership? If charitable gifting is involved, what role can it play to help? What steps can be taken now to lower the value of my estate? Ultimately, how do we make a zero-estate tax plan?
  3. The Executor/Trustee – “Who?” is often the most difficult question. There are many little-known answers that might be able to help you. Also, this step gives you the opportunity to decide the level of involvement you would like these powers to have.
  4. The Talk –Just because you laid out the plan does not mean your heirs will have happy holidays. Discuss your wishes with your heirs so everything is in the open, questions can be asked so no resentment or bitterness will be able to transpire in the future.
  5. The Update –This ongoing step will coordinate with the ongoing events of your life and current laws. Is what you want today what you will want in three years? Will your assets be the same? Maybe…maybe not. We definitely know the tax laws will be different in three years.I find that estate planning is something that too often people lose sleep over when they simply should not. Procrastination surfaces from the complexity of the task.  So, make it simple, get it done, and sweet dreams.
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