4 Simple Steps to Creating an Estate Plan

Published by Beth Schanou, JD

Most of the time, it feels like life is moving at the speed of light. I often feel my entire day, both at home and at the office, is spent in fast forward mode. As if it’s a race to get done as much as possible, I’m running from one thing to the next, all day long, and making sure every household member is fed, cared for, and attends school and their activities. Of course this includes the four-legged members of the family too.

Though our families and activities differ, I believe everyone can relate to over-booked schedules and the desire for some downtime. Imagine if suddenly you were not able to do everything you do now. Your family’s lives would be greatly disrupted. Thinking more deeply beyond the basics of schedules alone, who would raise your children if your spouse was not in the picture? Who would manage finances from bill payments to longer-term expenses like college? These are worthwhile questions to consider and it’s necessary to specify who should perform certain functions and how assets should be managed in the event of a disability or death.

It is common to define estate planning as a plan for our assets after death, but have you ever really wondered what is estate planning? Do not overlook the importance of an estate plan during a person’s life. The typical example is an elderly individual who can no longer handle their own financial decisions.  Having the right documents in place gives authority to a person of their choosing to act on their behalf as Agent. It is not just the elderly who might need an Agent appointed through a Power of Attorney. The young and invincible could suffer a debilitating accident that forever makes them dependent on others. We have seen this happen. Unfortunately it is not as rare as we would like to believe.

The best chance we have to restore some order when life gets disrupted by an unexpected or untimely event is having a plan. Our families deserve having us take time to think through what should happen and who should serve in certain roles so the plan can be implemented to keep chaos to a minimum. For purposes of simplification, I have boiled down the process into four simple steps:

  1. Realize you need an estate plan
  2. Meet with an estate planning attorney
  3. Review drafts and execute your estate planning documents
  4. Update titling and beneficiaries for your assets

Realize you need an estate plan

Accepting the responsibility for creating a plan for your family can be difficult to accept. With school back in session, I hear from my daughters when they had a fire drill. If school administrators didn’t think ahead of time who should be doing what in these circumstances, can you image the disorder and panic that could happen during a real life event? A plan should be thought through before it is needed.

Meet with an estate planning attorney

Once you accept responsibility for creating a plan, take action by scheduling a meeting with an estate planning attorney. During this stage, your plan will begin to take shape.  During the course of your meeting with the attorney, together you will design your personalized estate plan.

Review drafts & execute your estate planning documents

Once the concept of your plan has been outlined, the estate planning attorney will formalize your plan in draft documents. Take time to review the documents. Many attorneys will provide a summary or highlight the key provisions of the plan. Most of the language is necessary to ensure the documents meet legal requirements so do not worry about not understanding the entire thing. Focus on who is named to take action and how your assets would be administered and distributed. Do not be afraid to ask questions, but do not become paralyzed and allow the process to stop. Gain an understanding and comfort with your plan and schedule the next appointment to execute your estate plan.

Update titling and beneficiaries for your assets

Your estate planning attorney will conclude the process with recommendations for asset titling and beneficiary designations. Some estate plans might not require any title or beneficiary changes, but if changes are needed, do not underestimate the importance of this step. Take a retirement account as an example. If your brother is the named beneficiary, he will inherit that account regardless of what your Will states. Likewise, if you own an account jointly with rights of survivorship with one of your children, then that child receives the entire account at your passing even if you have three other children.

At our firm, we focus on holistic planning, which is not limited to investments or retirement planning alone. Instead, we think of the various parts of someone’s financial life as puzzle pieces, and we strive to put the pieces together to form a clearer picture. For personalized assistance, contact a Wealth Advisor today.

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