Personal Estate Planning: A How-To

Estate planning is a necessary step for all adults to ensure their belongings, property, and finances end up with their desired beneficiaries when they pass away. While many are unsure where to start, there are seven critical steps we recommend taking for anyone starting to create their own personal estate plan.

One of the best things you can do as you are developing your personal estate plan is to remain very honest with yourself. Not only will this protect your assets and your belongings, but it will help ensure an easy transition of assets for your loved ones when the time comes.

Step 1: Assess Your Current Situation

The very first thing to do is take an inventory of your current situation and assets. From small items (such as a coin collection) to larger items (like real estate) taking the time to list every asset can help you better understand what needs to be designated and to whom.

We recommend breaking your inventory list into two sections: tangible items and intangible items. To help ensure no asset is overlooked, we created the checklists below to aid in your list creation.

Tangible Asset Checklist:

• Land
• Real estate
• Vehicles (including motorcycles)
• Collectables (i.e. coins, trading cards)
• Boats and RVs
• Jewelry
• Any other personal item (no matter how small)

Intangible Asset Checklist:

• Checking accounts
• Savings accounts
• Life insurance
• Retirement plans (i.e. 401k or Roth IRA)
• Stocks and bonds
• Health Savings Accounts
• Any ownership interest in a business

After you’ve made your list of tangible and intangible assets, you are ready to move on to step two.

Step 2: Develop Goals

Providing guidance to your beneficiaries on your goals with the plan can help ensure it is implemented fully to your expectations. We recommend a mission statement for your bequests — whether a family member, friend, or charity — as this helps ensure your plan and/or donation is fully understood. 

Step 3: Prepare for Any Potential Tension

Death comes with a lot of emotion and heightened tension, especially if friction in a family or business already exists. Your beneficiaries will appreciate it if you put extra thought into any strain that may come from your passing, especially if it eases tension.

We strongly recommend taking the time now to consider any stressful situation within your family dynamic that would cause friction among others if you were to pass. This will allow your professional estate planning team (see step four) to make your plans clear for beneficiaries.  Losing a family member is hard enough; going through a legal battle over unclear estate plans will make it even more unbearable.

Step 4: Engage Professionals that Can Help

Collaborating with professionals on your estate plan can be one of the best things you can do for your beneficiaries. Not only does this ensure that all of your plans are set in place to your preference, but the team can also help you as you go through the planning process to make sure no stone is left unturned.

A few professionals we highly recommend consulting are:

• Trust & Estate Attorneys
• Financial Planners
• Accountants
• Psychologists (in certain cases)

Step 5: Develop a Plan

Once you’ve identified your team of professionals, work alongside them to develop your official estate plan. Use their experience to your advantage and truly consider their advice—no matter how difficult it may be. Seeking the greater good is not always an easy path, but your team of professionals is there to help bounce ideas off of. They will ensure your plan is well-written and will be executable based on your wishes.

Step 6: Execute Your Plan

Alongside your team of professionals, executing your plan is the most critical step as this puts your goals and desires into action. It is incredibly important to complete this step under the supervision of the professionals you developed the plan with to ensure that nothing is incorrectly filed or missed and everything is properly filed, as well.

Step 7: Monitoring Your Plan

After your estate plan is executed, you should continue to monitor it with your team. Life is always changing, and your estate plan should adapt to reflect your evolving situation. Keeping your estate plan up to date can ensure that everything is as smooth as possible for your beneficiaries when the time comes.

Bottom line: Estate planning is not an easy task, but it is critically important to leave clear expectations for a smooth division of assets among your beneficiaries. At Tax Saving Professionals, we are available to help you jumpstart your estate plan today. Give us a call to schedule a time to speak to one of our professionals. We’d be happy to help!