Thinking Strategically about Estate Planning

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Crafting a carefully considered estate plan can ensure that asset distribution aligns with both your intended legacy and your beneficiaries’ needs.

Estate Planning is just about deciding who gets what when you’re gone; thinking about estate planning means making smart choices that can help save on taxes, increase your investment returns, and insuring there is someone who can manage your affairs if the unexpected happens. So, where do we start?

First, you’re gonna need some important documents. The most important one is your will, which outlines what happens to your stuff when you pass away. You’ll also name someone you trust as the executor in your will. Their job is to take care of everything—settling debts, paying taxes, and making sure your assets go where they’re supposed to. Keep in mind however that your will doesn’t cover everything. Things like life insurance payouts, retirement accounts, and some investment accounts don’t fall under the will’s umbrella.

Next, consider trusts. Think of a trust like a special box where you can put assets for someone else (like a loved one) to use or keep safe. You get to decide the rules—how and when the assets are used, and who gets to use them. Trusts can either be revocable (you can change them while you’re alive) or irrevocable (once it’s done, it’s done).

You can also include a letter of intent with your will (or a “purpose statement” within a trust). It’s a message from you to your executor, trustees, and beneficiaries to give them more details about your wishes. The “letter of intent” is not legally binding, but it can provide some helpful guidance. A “purpose statement” is slightly different in that it is part of the Trust Agreement and does have legal effect.

Sometimes, people become too ill or injured to manage their own affairs. That’s where a Power of Attorney comes in. It’s like handing over the keys to your finances and legal stuff to someone else for a while (or permanently), but it ends when you pass away.

There’s also something called an Advance Directive for health care. It’s your way of letting healthcare professionals know what you want if you can’t tell them yourself.

Oftentimes the majority of a person’s assets will get to the beneficiaries in a manner separated completely from any will or trust that was set up.  This happens when most of the assets are held in a retirement or other investment account that designates the beneficiaries of the account. It’s also the case with life insurance policies and some other jointly owned property.

If you own something jointly with rights of survivorship (JTWROS), it automatically goes to the other owner when you die. This can be a handy tool for stuff like bank accounts, property, and even vehicles. Just make sure your will or trust doesn’t contradict this.

Probate is the legal process where the court checks out your will and gives the executor the green light to start managing your estate.

If you’ve got a trust, the assets in it are handled by trustees. These assets are given to beneficiaries based on what the trust agreement says, and they bypass the probate process.

Are you ready to get started? Your first step is to take stock of everything you own. Then, you should find a good estate planning attorney to help you draft the necessary documents and sort out the finer points of your plan. They can help you make sure everything is titled correctly and your trusts are funded properly. Make sure to let your executors, trustees, and beneficiaries know about your plan so they know what to expect.

If you or a loved one needs assistance thinking through your estate planning, do not hesitate to BOOK A CALL using our calendar. We are here to help.