When people hear the term “estate planning”, they typically think of the distribution of one’s assets after their death. 

In reality, however, the term encompasses the accumulation, conservation, and distribution of an individual’s assets.  The goal of the process is to enhance and maintain the financial well being of individuals and their families, during life and at death.

Why is Estate Planning Important?

Regardless of your age or financial situation, estate planning can accomplish the following:

  • Specify who will care for your minor children.
  • Identify who will manage your assets during your lifetime (should you become unable to manage them yourself) and at your death.
  • Ensure that your assets are distributed to the right people, at the right time (age), and in the proper form (outright, in trust, etc.).
  • Minimize the time, taxes, and expenses involved in settling your estate.
  • Specify what life-sustaining medical care you should (or should not) receive.
  • Identify who will make medical decisions for you, should you not be able to make those decisions for yourself.

What Steps Are Involved in the Estate Planning Process?

In its most basic form, estate planning is a five step process:

1.  Gather your data and assess your current situation.

 a.  Make a list of everything that you own.

b.  Note how each item is owned (individually, jointly).

c.  In the case of life insurance and retirement benefits, note who the beneficiaries are.

2.  Identify your goals.

a.  Who should receive what, when should they receive it, and in what form should they receive it? 

b.  What will be the needs of your family members after your death?

3.  Develop strategies to meet your goals.

a.  What documents need to be drafted?

b.  What tax strategies need to be implemented (if any)?

c.  Who should be assigned what roles?

d.  What beneficiary designations need to be updated?

e.  What insurance should be purchased (if any)?

4.  Implement your strategies.

a.  Sign the necessary documents, make the necessary beneficiary designations, buy the necessary insurance, etc.

5.  Periodically review your estate plan.

Estate planning is a process.  You should review your plan periodically, or whenever there is a major change in your personal or financial situation.

Who Needs Estate Planning?

You do.  Proper planning can provide anyone with the peace of mind associated with knowing that their affairs are in order and the needs of their loved ones will be well provided.