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Estate Planning 101

I tell my clients that the estate planning conversation is the most emotional one they will ever have, both with their families and with me. That said, “emotional” doesn’t have to mean “difficult” or “depressing”. It is usually emotional because your wishes naturally flow to the surface, without much effort. Wishes that reflect the things and people you care most deeply about.  

If you’ve never given thought to your estate after your passing (that is, all that you own, your debt, etc.) it’s never too late to start. Rest assured that you’ll probably feel relieved that you’ve handled all of the important details and it will bring a sense of peace that you’ve taken care of your family to the best of your ability.  

Having an estate plan will protect your beneficiaries, reduce the chance of family tension and it could even spare your heirs from significant tax implications. 

Here is a quick review of what estate planning is, what you should consider in your estate plan, and what can happen without having an estate plan in place. 

What is an “estate”?  

Even though it has a very affluent sound to it, “estate” is just a legal term given to the collection of property, money and belongings you have (whether individually or jointly).  

Things that fall into your estate include real estate (your house, vacation home, rental properties you own, etc.), jewelry, bank and retirement accounts, cash, stocks, bonds, business assets, pets, physical belongings like art, instruments, and even furniture. It also includes money that will come after your passing to your beneficiaries, like life insurance.  

Your estate can include any bit of your belongings you want, whether valuable or not. Many have the misconception that you only need an estate plan if you’re wealthy, but that couldn’t be farther than the truth. Even sentimental items in the family that may not have monetary value can be bequeathed if you wish.  

Upon your passing, your estate will be handled by the hierarchy of those you’ve put in charge of it.  

What about a will? 

Sometimes, people ask why they should have an estate plan and think that a will is enough. Certainly a will is a great idea. But it’s only a piece of the larger estate puzzle. It’s really the foundation of the entire plan. A will can be cheaply done with a package you can order online, but they can also be done through an attorney (and thus, cost much more). 

In a will, you can specify what items/property/money you want to leave to your family, friends, charities and other organizations and whom you want to act as the executor of your estate (to pay taxes, debts, distribute your items according to your wishes, etc.), who your beneficiaries are, just to name a few things. 

Regardless of how you do it, a will is incredibly important to have. Without one, someone else will make the decisions of where your belongings and assets go. And again, a will is only a piece of the larger puzzle. Sometimes, a will isn’t sufficient to cover all of the requirements of your estate after your passing.  

What should appear in an estate plan? 

Along with your wishes of who gets what and what goes where after your passing, you also want to consider long-term care and even disability plans in your estate plan. If you have a business, you want to make sure you have a good succession plan in place as well.  

Your estate plan should be well crafted to reduce the tax burden that would fall upon your beneficiaries, too. Having a well-developed plan for tax-efficient wealth transfer is absolutely necessary.  

If you have young children, declaring who will take care of them is only part of it. If you have other wishes for their care, make sure to discuss these wishes with your attorney and financial planner.  

What happens if I don’t have a plan? 

Essentially, someone else steps in as your executor and makes all the decisions for you about everything. Even if your family protests and says you would/wouldn’t want it done X,Y,Z way, it doesn’t matter. The state would step in when it comes to the care of your child/children.  

You also increase the risk of family tension & fights over beloved possessions and money. The last thing you want, during such a painful time for your loved ones, is to not have your wishes be crystal clear. 

If you want a thorough estate plan… 

Our 5-phase planning process includes one of the most thorough estate planning processes in the industry. Talk to us today to see how we can help you.  


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