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Four Straightforward Steps to Estate Planning

7 mins read

Presented by Fred Gaskin

Our clients face numerous uncertainties as part of life and frequently feel overwhelmed due to health issues, family dynamics or financial concerns. We’ve long advocated to clients that taking control of their finances can help them be better prepared for these uncertainties which can help to reduce stress and anxiety. 

One important part of the financial puzzle is having a solid Estate Plan. Clients are often surprised when we bring it up, but a well-considered Estate Plan can make a significant difference, both to you, and your heirs. 

The estate planning process doesn’t have to be a burden. Here are four easy-to-implement steps to create and maintain an estate plan that can help provide you and your heirs with greater financial confidence:

1. Take stock. You need to know exactly what you’ve got before you can make a plan for what to do with it. An inventory of your estate—everything you own and owe—will help you make smart decisions about your assets and make things easier and less costly for those people who will one day be tasked with handling your affairs. 

To start, gather and document the following information:

The value of your home and any other real estate, cars, jewelry and other personal property

Recent bank, brokerage and retirement account statements

All insurance policies, their cash values and death benefits

All liabilities—including mortgages, lines of credit and other debt

2. Make a plan. Estate settlement rules vary from state to state and can get complex, so it’s best to work with an experienced estate planning attorney when making your plan. Even if you choose to design your own plan, you’ll want to have a professional review done to ensure that it’s set up accurately. 

To prepare for your first meeting with your attorney, answer these important questions to determine your estate planning preferences:

Who do you want to manage your financial affairs if you become incapacitated?

Who do you want to inherit your assets, and in what proportions? 

Who should be responsible for distributing your assets to your chosen beneficiaries?

Who do you want to care for your minor children (if applicable)?

How much is needed for your children’s care and education (if applicable)?

3. Put your plan into action. An estate planning attorney will craft an estate plan that reflects your wishes and meets state and federal laws. This plan will likely consist of a will that directs how your assets will be distributed at death as well as medical and financial powers of attorney documents that spell out who will make financial and health care decisions if you can’t. It also may include trust documents to manage the distribution of certain types of assets. 

Tip: If you do set up a trust, fund it right away. Otherwise, the agreement won’t take effect, and your assets may not pass to your beneficiaries as intended.

An attorney also can help you with any key issues that you’re unaware of or may have overlooked. For example, a professional review might reveal that you need to update your beneficiaries or retitle your assets. (You can also get help from your financial advisor with asset titling and beneficiary designations on your investment accounts.)

4. Update your plan regularly. Estate planning is not a “set it and forget it” one-time event. You’ll want to review your plan regularly to ensure that it continues to reflect your wishes—especially in the wake of any new major developments that occur in your life, such as significant investments like purchasing a home, and family situations like births, deaths, marriages and divorces. Example: As the years go by, you may find the need to update your beneficiary designations or other key pieces of information to ensure that your assets go exactly where you want them to go. What’s more, tax laws change, and you’ll want to be sure your plan is in line with current estate tax rules and regulations. 

As I’ve pointed out in prior columns, the hardest part for most clients in these situations is just getting started. Once you’ve jumped into the process, you’ll realize that by thoughtfully considering your estate planning, you’ll have more confidence and importantly, a better understanding of what you need to do to manage your future. 

Fred Gaskin is the branch leader at the Charles Schwab Independent Branch in Bluffton. He has over 35 years of experience helping clients achieve their financial goals. Some content provided here has been compiled from previously published articles authored by various parties at Schwab. 

The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. This information does not constitute and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, please consult with a qualified tax advisor, CPA, Financial Planner or Investment Manager.

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