Four Tips for Getting Started on Your Estate Plan

You need to know what you have and what you want done before any attorney can give you sound advice and draft appropriate documents.  Be prepared to give this information to your estate planner at your first consultation.

1. Assemble a list of your current assets and liabilities.

Include information about expected inheritances or other significant property or sums. With any asset that can have a beneficiary designation such as life insurance or and IRA, verify who the current beneficiary is. This information is the foundation for your financial estate plan, for tax planning as well as asset protection planning - protecting assets from creditors. It is important for emergency planning if you become disabled, as well as your legacy planning after you die.

2. Determine who will receive your assets.

Who should receive what?  Should beneficiaries have to share in the ownership of certain assets, or would it be better to have them receive some proportion of the total value of your estate?

For example, if there are two brothers who do not get along, it may be best not to give your home to them.  They will likely fight over who gets to live in it, or how much to sell it for, or who has to fix the leaky faucet.

3. Decide how and when your beneficiaries will receive your assets.

There are basically two ways to leave your assets to your beneficiaries - outright or in trust. Which way you choose will depend on the beneficiary's age, health, and family and financial situations.

Should all beneficiaries receive their gift outright immediately upon your passing?  What if some are children?  What if a beneficiary has significant impairments and an outright gift will disrupt public benefits?

Your estate planning attorney will walk you through the needs of each beneficiary and then help you decide what to do for each one. If a trust is recommended for a beneficiary, you'll need to determine how long it should continue - for a fixed number of years, until the beneficiary reaches a specific age or achieves a specific goal, or for the beneficiary's entire lifetime. You'll also need to determine what will happen to the assets remaining in the trust if the initial beneficiary dies before the trust funds have been completely used.

4. Choose someone to be in charge.

This is probably the most important step in creating your foundational estate plan - choosing someone who will act in your best interests if you become disabled, or in your beneficiaries' best interests after you die.

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