Top 4 Tips for Estate Planning

Estate planning can be overwhelming. There is so much to think about and to consider and it doesn’t just stop once you have a plan in place. Reviewing and updating your estate plan on an annual or periodic basis is important.  Before you make an appointment with your estate planning attorney, however, it’s a good idea to look at your situation and if needed, talk to your advisor to get your financial matters organized.  Getting your financial house in order and reviewing your estate plan with your Fiduciary Investment Advisor before you meet with your lawyer may help reduce your legal fees.  What’s not to like about that?

Here are the top 4 estate planning tips:

1. Create a financial blueprint

If you are just getting started with your estate plan, you will likely have to fill out a questionnaire to identify your goals and to capture information about everything in which you have a financial interest.  It can be a daunting task.  Just take it one step at a time. Here is what you will most likely need to gather: a list of your assets (the things you own) and their values, your liabilities (the debts you owe), how things are titled and where your property is located. Gather supporting documents like life insurance and annuity contracts, financial account statements, deeds and beneficiary designations on your retirement accounts. In doing this, you may uncover an overlooked account or an outdated beneficiary designation that you can address right away. Having as much of your financial blueprint prepared before your estate planning meeting will allow your attorney to focus more time on pressing legal matters.

2. Evaluate ways to avoid probate

If you own an asset individually (and not in a trust) there is a chance that upon your death your estate will have to undergo probate to clear the titling of that asset for the subsequent beneficiary.  There are pros and cons of probate – and your attorney is best suited to review these with you.  But it is generally acknowledged that if you design your overall estate plan to avoid probate, you will save legal fees, avoid potential family squabbles, protect your estate’s privacy and facilitate a timely distribution of property to your intended heirs.  These benefits alone are usually enough reason to look at what steps can be taken to avoid probate.  Chances are you already have some assets that do not require probate.  Certain financial accounts that name a beneficiary, such as IRAs, life insurance contracts, annuity contracts and 401(k) plans, do not have to undergo probate because ownership of those accounts passes automatically to the beneficiary upon the decedent owner’s death.  An asset jointly-owned with a spouse avoids probate, too.  Attorneys generally recommend the use of revocable and irrevocable trusts as the principal method for avoiding probate.  Before you meet with your estate planning attorney, it’s helpful to have a preliminary discussion on probate avoidance techniques with your advisor and see if there are some interim steps you can take with respect to titling assets to substantially avoid probate of your estate.

3. Identify who will manage and settle your estate

An effective estate plan ensures an orderly distribution of property with minimal drama and delay.  It is important to name the right parties in your estate planning documents to ensure your wishes are carried out as intended.  Typically, a surviving spouse, a trusted attorney or financial advisor or a responsibly minded child is given a key role as executor or trustee.  But each family is unique and not everyone is up to the task of administering an estate or managing the complexities of a trust.  If you need help understanding the various roles and responsibilities that come into play upon your death, reach out to your trusted advisor. They can help you identify who is best to serve in these important fiduciary capacities.  An advisor can serve as current or successor trustee, agent for trustee or simply a guiding light and trusted partner for your family.

4. Work with someone who can help frame issues

Estate planning is a complex mixture of property stewardship, taxation, family dynamics and emotions.  Having the right people on your side, like a trusted advisor, can help make a somewhat difficult process that much easier.  CFPs are a great resource. A CFP is a bit like a Swiss Army knife:  there’s a lot of functionality in one instrument.  They have knowledge and agility and they draw upon their multi-disciplinary expertise and synthesize information to arrive at practical solutions.  Working with a CFP can help you identify, research and frame issues ahead of your discussions with your estate planning attorney so that you can use your time more efficiently.

Many of the advisors here at Unified Trust are CFP’s and are happy to assist you. We have strong ties and deep relationships with many estate planning attorneys.  If you need an estate planner, we can provide referrals for you to evaluate.  Our services complement - not replace – those of your attorney.  Your advisor will not draft your will or trust but can help answer questions, educate and advise you on most facets of estate planning. 

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