Understanding the estate planning process

It is natural for many people to put off planning their estates. After all, no one wants to anticipate his or her own death. In addition, many people may believe that only the wealthy require estate planning or the process that is involved is tax and estate planning, which can be put off and completed at a “later date.”

Well they may be wrong on both counts. Your level of wealth and the ultimate tax consequences of your estate become secondary to the planning and care of your family and other heirs. A well-structured estate plan is invaluable. With a Revocable Trust, you can control the distribution of your assets and possessions, as well as name guardians for your children or plan care for other dependents.

The Trust usually contains a “Pour Over Will.” The estate planning process may raise some difficult emotional and personal issues; however, your children will appreciate that fact that you did it.

The attorney, professional financial insurance agent, bank trust officer or accountant are all possible members of your team, depending on the size and complexity of your estate. They can help you complete an analysis of your current estate by looking at your financials position as of today and helping you analyze your family’s needs for the future.

Does a family member have special needs or require medical attention? How much will an education cost when your children reach college age? How will your family’s overall cost–of-living requirements change? How will estate taxes affect your assets as they are currently held?

The answers to these questions can help you develop an estate plan that will adequately provide for you family’s needs. A complete and thorough estate analysis requires gathering any and all materials involving current or future income, property ownership, insurance and legal arrangements already in place. This includes records of the following: current income from employment and all investments, any expected deferred compensation.

All retirements benefits, from Social Security, IRAs, pensions and profit-sharing plans, investment documents, certificates, passbooks, deed to primary and all of the real estate that they own, life insurance policies of which you are the owner, the insured, or the beneficiary, any other trust agreements, or your will, if you have one, current and expected debts and obligations, including mortgage and loan balance, real estate liens, taxes payable, consumer debts, and estimates of funeral costs and estate settlement expense. Once all of this information is assembled, a complete analysis can begin that will give you the basis for a solid estate plan.