What's Involved in the Estate Planning Process?

When most people think of estate planning (if they think about it at all), they usually think it means making a Will. But estate planning is much more than just that. It’s a process of wealth management, strategic future planning and documentation that will ensure that your estate is distributed  and your loved ones are provided for in accordance with your wishes.

Justia.com describes estate planning this way: “Creating an estate plan ensures that all property will be distributed according to the personal wishes of the deceased, and that those who are benefiting from the estate receive the largest distribution possible with a minimum amount of delay. Specifically, estate planning allows an individual to decide exactly who will benefit from their estate, and to what extent.” The objectives of your estate plan will include all or most of the following items:

• Distribute your wealth and assets to your spouse  or partner, children and/or other family members.
• Minimize or defer taxes payable at your death to maximize the value of your estate.
• Set up a trust to maximize future tax savings and provide for your dependents.
• Protect your assets from creditors after your death.
• Avoid probate by putting assets into joint names or moving them into a trust.
• Appoint a guardian for minor children or dependent adults.
• Provide for the eventuality of your own loss of mental capacity.
• Ensure that your health care and end-of-life preferences are known by your family and physician.
• Make arrangements for funeral / memorial, burial, cremation, and organ donation.

A good estate planning strategy must include input from your legal and financial advisors. You should discuss your needs and wishes with your lawyer, your accountant, and a life insurance specialist. These experts can help you to design an estate plan that distributes your estate as you wish, that will have sufficient funds to cover the life of the trusts, and that is the most effective at reducing and/or avoiding taxes and probate costs. The cornerstones of your estate plan will be:

1. Last Will and Testament,
2. Living Trust Declaration,
3. Enduring Power of Attorney (EPA) for financial matters,
4. Power of Attorney for Health Care.

In addition, you should consider preparing an Advance Medical Directive, to formalize your wishes for end-of-life care.

Life insurance is an important element of any comprehensive estate plan. It can provide ongoing income for your family. There are several options available – term life, whole life, and variable life policies. A life insurance broker can help you find the right coverage to fit your circumstances and budget.

If you own a family business, you should also consider what will happen to the business if you die, or if you simply want to retire and let someone else take it over. Will you sell it, will you pass it on to your children, or have a long-time employee take it over? A business succession plan is an important tool in your estate planning toolbox. No matter how young or old you are, if you have a family, if you own a home, if you have a business, it’s time to start your estate planning now.