Estate Plan Organizer – What happens after the fact?

The below is not intended to be tax or legal advice. Always seek the counsel of a legal or tax professional.

We spend our whole lives trying to grow our pot of gold. If we’re lucky, we grow the pot big enough so that one day we can stop working altogether and enjoy the fruits of our labor. And if we’re really lucky, there’s something left over for those we care about.

The question is, how does that happen? And how should you go about it? While not entirely comprehensive, below are a few suggestions to help get you started.

Why should you care about getting your estate plan squared away?

The biggest reason to take the time and effort to prep your affairs is to not leave behind a headache. While you may think “it’s not my problem,” just know that not executing your plan may leave more in Uncle Sam’s pocket.

According to a recent study, roughly 60% of folks think it’s important to have an estate plan but only 1/3rd of them actually do.

To illustrate the point a bit further, a 2018 EstateExec survey estimates that it takes roughly 700 hours to settle an estate valued at $1-$5mm.

You think there are a few attorneys who would love to bill 700 hours? I think so.

The 5 key benefits to preparing your estate plan.

While there are many more, below are a few to express how beneficial this can be.

  • Transparency: Putting pen to ink and making it official will increase the likelihood that your wishes are carried out.
  • Pace: As previously mentioned above, an estate that’s buttoned up will settle a lot quicker than one that’s not. Less bureaucracy and less hands in the middle.
  • Less Expensive: A quicker settlement usually means less is spent on administrative costs (i.e. not 700 hours of billable time).
  • Tax Friendly: If the situation calls for it, you can get extremely creative in reducing your estates’ tax bill.
  • Set Boundaries: Have an ex spouse or family members you want to ensure do not receive part of the inheritance? Estate planning is the way.

Get your Estate Plan Checklist!

Download this article in checklist form.

    We respect your privacy. Unsubscribe at any time.

    The 3 challenges in crafting your estate plan.

    Who gets what: It’s important to just “start” and not get bogged down with the minor details. What are your major possessions and who would you like to give them to when the time comes? Here’s a quick checklist:

    • Ballpark your net worth.
    • Outside of the usual – cash, investments, etc., are there physical items you’d like to include? Collectibles, cars, etc.?
    • Who are the main beneficiaries that come to mind? FYI, beneficiaries are not always “people.” Are there charities or other entities you’d like to see benefit?
    • Is there a specific person you’d like to settle and manage your affairs? Are they willing to accept the role?
    • Identify any potential conflicts. Will both kids want the vacation home? Are you leaving more for one kid than the other? The more you can preempt any disputes, the easier it will be. Ditto for laying your cards on the table before something happens.

    Making it official: It’s highly suggested that you seek professional counsel in this regard. While there are several ways to go about it, at the end of the day your estate plan is a legal matter. Here’s a quick overview of documents to consider:

    • Will: Depending on how complex your situation is (or isn’t), a will may suffice. This doc typically outlines who gets what. You’ll likely need to name an executor who will manage the probate process of your estate. This can be a family member or a professional entity.
    • Trust: Often a supplement to your will, if your situation is a bit more complicated, your legal professional may suggest that you draft a trust. A trust can get a bit more creative than a will and offers a layer of privacy that public probate does not.Let’s say that you’re re-married and want to provide for children from your first marriage but not your ex spouse. Or your kids are not mature enough to handle their inheritance. That’s where a trust can help delineate stipulations. You’ll likely need to name a trustee to oversee the terms of your trust.
    • Other Trusts: As previously mentioned, trusts allow you to get creative based on the complexity of your situation. Maybe you own a private business, have charitable wishes you want to see carried out, or need to be really careful about the effect of taxes on your estate. Specialized trusts can be created to help mitigate these concerns.
    • Medical Power of Attorney: At a basic level, this document typically gives someone discretion on your medical care.

    Drawing the big picture: While you’ve done a lot of the leg work, you’re not quite there yet. It’s good practice to put these items to work.

    • Make a list of the key persons, professionals, executors, and trustees that your heirs may need to contact in the event something were to happen.
    • Jot down other helpful information for your executors/trustees: location of your will/trust, important records, house keys, security logins, etc.
    • If you created a trust, make sure it’s funded. Your legal professional can assist with this, which may essentially mean retitling some of your assets and accounts.
    • Make sure your beneficiaries are up to date (bank and investment accounts, insurance policies, etc.).
    • Review periodically: While tedious, life happens. Make sure to process updates for new births, deaths, marriages, etc.

    Getting Help

    Make no mistake. If you don’t assume control over the matters in your estate, state laws will. Dying intestate (without a will) essentially guarantees that more money and time is spent in settling your affairs.

    Rather than leaving a headache behind for your loved ones, grab some piece of mind and do some of the work beforehand. If you need further resources, let us know and we’d be happy to make the proper introductions.