ESTATE PLANNING
Estate planning is the process of arranging for the management and transfer of your assets during your life and after your death or incapacitation
Investment management and retirement planning knowledge are both essential parts of an estate and a retirement plan. A thorough financial plan should address the management of financial assets and the manner in which those assets will be allocated at death. The consolidation of the estate or trust documents with investment asset management and reporting can facilitate the efficiency of beneficiary transfers. Estate planning is a useful tool for anyone with assets, not just the wealthy.
Although I am not qualified to prepare legal documents (I’m not an attorney), my credentials do include a CPA, CFP®, and an MBA. I have experience with the tax, investment, and recommending asset protection strategies of estate planning.
Here is some information to help with Estate Planning knowledge:
Key estate planning documents
Last Will and Testament: A will is a legal document that specifies how your assets should be distributed after your death. It also allows you to designate an executor to manage your estate and name guardians for minor children or dependents.
Living Trust: Unlike a will, a living trust is a legal arrangement that holds your assets while you are alive and facilitates their transfer to beneficiaries upon your death. Assets held in a trust can bypass the lengthy and costly probate court process, offering more privacy and a quicker transfer to heirs.
Durable Power of Attorney: This document authorizes a person of your choice to manage your financial affairs if you become incapacitated and unable to do so yourself. This allows your agent to pay bills, manage investments, and handle other financial matters on your behalf.
Advance Healthcare Directive: Also known as a living will or medical power of attorney, this document allows you to express your wishes for end-of-life medical care. It can cover decisions such as desired treatments, life-sustaining measures, and organ donation.
Beneficiary Designations: For accounts like 401(k)s, IRAs, and life insurance, the beneficiary designation form typically supersedes any instructions in your will or trust. It is important to keep these up to date and in alignment with the rest of your estate plan.
Benefits of estate planning
Avoids court intervention: Without a plan, the state determines who receives your assets and who cares for your dependents through a public, time-consuming, and expensive court process called probate.
Protects your loved ones: A clear estate plan prevents family disputes by clearly outlining your wishes for asset distribution, guardianship, and end-of-life care.
Manages taxes: For larger estates, a proper plan can use strategies to minimize estate taxes, leaving more for your beneficiaries.
Provides for incapacitation: It ensures that a trusted person can make financial and medical decisions for you if you are unable to, without requiring a court to appoint a guardian.
How to get started
Inventory your assets and debts. Create a list of everything you own, including real estate, bank accounts, investments, personal property, and debts like mortgages and loans.
Define your goals. Determine who you want to receive your assets and who you want to make financial and medical decisions on your behalf.
Consult a professional. While online services are available, an estate planning attorney can provide expert guidance, especially for complicated situations involving high assets, blended families, or special needs beneficiaries.
Complete the documents. Work with an attorney or reputable online service to draft, sign, and notarize the necessary legal documents according to your state's laws.
Review and update. Your estate plan should be reviewed every few years or after major life events, such as a marriage, divorce, birth of a child, or significant change in assets.
