Are you childfree? Are you planning with an elder parent? Do any of your potential beneficiaries have special needs that must be taken into consideration? Are any of your beneficiaries minors? The first step of planning is to take a moment to consider what makes your situation unique.
Although estate planning has many aspects, it's good to start with the fundamentals.
A recent NASDAQ.com article, titled "Estate Planning Guide 101: A Basic Guide To Establishing Your Estate," gives some basic estate planning instructions that can help get you started.
Outline Your Estate. It is important to outline your current net worth. Forbes describes this equation as:
The original article explains that assets include information detailed in bank statements, investment statements (such as from mutual fund accounts and retirement plans), trust assets and business interests. Also, include personal property and real estate. Liabilities include debts reflected on credit cards, mortgages, tax bills, student loan statements, business loans, and other indebtedness. Once you account for your living expenses, you can then see what can be passed to your beneficiaries, and whether you should gift during your life.
Name Your Beneficiaries, Divide the Assets. Next you need to decide who will be the recipients of your estate. This can be very personal and needs to be handled with care, as it is this point in the planning process when you need to think about how much of your estate will go to family and how much will go to charity.
An interesting approach that I have thought about since I heard it expressed (it was not original with me) is an approach based upon values, rather than individuals. The Values Approach involves carefully analyzing the values that are important to you, and then allocating your assets to those individuals or organizations that best represent and further those values. This is much different from the Individual Approach, which usually starts with “Well your children get everything, how old should they be?” rather than focusing upon whether the children, particularly if they are grown and educated, are the best representation of the values you wish to preserve. Perhaps this is a radical approach, and it is certainly different that our usual approach.
Name Your Trustee. Naming your trustee needs to be handled with the same amount of care that you used when divvying up your assets. Selecting the person to be in charge of your affairs is no small decision, the original article cautions. Naming your trustee takes a significant level of trust, responsibility, and foresight.
Hire a Lawyer. As you work through theprocess, engage a qualified estate planning attorney. Do not leave planning your will or estate for later. Do It Now! Take the time to speak to your estate planning attorney and map out the details of your legacy now. In later articles, I will discuss the benefits of using someone with experience in this area, rather than an internet program or something like LegalZoom. But that is another issue. First, sort out what you have, and what you want to do.
If you would like to chat with us at the Graham Law Firm, you will always find our information on our website www.thegrahamlawfirm.com.
Reference: NASDAQ.com (October 15, 2014) "Estate Planning Guide 101: A Basic Guide To Establishing Your Estate"