Seven Steps to Estate Planning Peace of Mind

Most of us don’t want to think about or discuss what will happen after we die. Because estate planning forces us to do just that, we tend to avoid it. 

However, if you want to protect your family and your assets, creating an estate plan is a necessary task. And if you take the right steps, you can ensure that your assets are properly divided among your heirs, and that the plan protects your family from taxes, court costs and attorney fees.

If you want to protect your loved ones from these heavy financial burdens, take the following seven steps for estate planning peace of mind:

Step One: Act now and keep acting

Commit to creating an estate plan as soon as possible – otherwise, your family will pay the price. If you don’t have an estate plan, federal and state tax laws will determine how your estate is settled, who will receive your assets and how much they’ll have to pay in taxes.

Additionally, your estate plan should not remain static over the years. As your personal or family situation changes over time, you should make the appropriate updates to reflect these changes.

Step Two: Figure out what you want

Although much of estate planning involves reducing taxes and avoiding probate, it’s mostly about leaving your assets to loved ones. Consequently, one of the most challenging aspects of estate planning is deciding who gets what.

Before you meet with an advisor, sit down and make these decisions on your own. The key here is to decide what you really want. Don’t try to make choices based on what you think your heirs want. It’s impossible to please everyone.

Step Three: Get expert help

Once you commit to creating a plan and decide how you want to distribute your assets, you’ll need the help of experts. Estate planning involves many different components, including property law, probate law, taxes, wills and trusts, and investments.

Don’t try to handle this complicated process on your own. You can hire an advisor like us to help you build your plan. Tell us what it is that you want to do with your estate plan, and we can get to work figuring out how to achieve those goals.

Step Four: Steer clear of federal estate taxes

Make sure that your estate planning advisors do everything in their power to help you avoid federal estate taxes. For example, when property passes directly to the surviving spouse, this can lead to hundreds of thousands of unnecessary federal estate taxes for your ultimate heirs. 

That’s why it’s important to tap into tax strategies such as annual gift tax exclusions, lifetime exemptions and gift-splitting to reduce your overall estate taxes. Make sure that your advisors use these tax-saving methods wherever possible.

Step Five: Get in synch

Because there are various components to an estate plan, it’s important to keep everything well synchronized.

We can work with you to coordinate your ownership of property, trust agreements, beneficiary designations and terms of your will to ensure that your estate is properly transferred to your heirs. Otherwise, mistakes could be made after your death, and your estate won’t be handled in the way you intended.

Step Six: Don’t discuss it with family

Although you’ll be discussing your estate plan in great detail with your advisors, you should probably avoid this topic of discussion with your family. If you share the details of your plan with family members, you may create false expectations.

Creating and maintaining an estate plan is a lifetime process, and the details may change as your circumstances, goals and plans change. So, don’t make any promises to your family members. Try to reserve estate plan discussions for meetings with your advisors.

Step Seven: Keep accurate records

Because you’ll need to continually review and update your estate plan, it’s important to maintain current financial records. Hold on to all your estate planning and financial documents and store them in a secure place, such as a fireproof safe.

Keep everything together so that your files can easily be found if anything were to happen to you. You may want to put together an inventory list of your assets and update it every year or so. Keep this list along with your other estate planning records.

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