The Key Pieces of an Estate Plan to Help Preserve Your Family and Legacy
Estate planning means much more than merely drawing up a will. It means establishing an integrated plan designed to safeguard your estate, future generations, and those you love. It also means knowing your assets will be managed appropriately and your legacy preserved.
An effective estate plan should be comprehensive, so it’s essential to consider your overall financial objectives and develop your plan with expert assistance. At a minimum, these professionals would consist of an estate planning attorney and a financial advisor and may also involve others such as your CPA or an appraiser.
Most important, don’t put off estate planning. It is never too early to start a plan designed to help preserve, protect, and transfer wealth to those individuals and organizations you care about most.
Talking with a Gratz Park Private Wealth financial advisor in conjunction with a tax planning attorney and CPA will help create the best strategy for you to address all of these areas and more.
Click here for a copy of our Family Love Letter to help you simplify matters and provide your loved ones with pertinent information at a time of need.
Creating and Maintaining a Successful Estate Plan
You have worked long and hard to build your estate. To ensure that your wishes will be carried out, and your wealth and legacy preserved, there are five key pieces to a successful estate plan, including:
1. Take The First Step – Commit to Creating an Estate Plan
While estate planning can be an uncomfortable topic, not having a plan in place can leave your family and your legacy in an even more difficult situation. Surprisingly, many intelligent, wealthy, and otherwise well-advised individuals put estate planning off or simply ignore it to their detriment. It is never too early to begin planning because there are plenty of potential life events – untimely death, accident, dementia, or injury – that could leave your loved ones confused and worried about what to do because there was no plan in place.
Without your own plan, you may not realize it, but the government has an estate plan already prepared for you. The process is called intestate succession. In addition to being expensive, public, and cumbersome, this process may ignore important needs, such as designating a proper guardian for your minor children who you may not have chosen yourself.
It is never too early to begin planning because there are plenty of potential life events – untimely death, accident, dementia, or injury – that could leave your loved ones confused and worried about what to do because there was no plan in place.
2. Complete All Components of Your Estate Plan
Often, individuals think of estate planning as simply signing a will. It takes more than that, particularly in today’s more complex tax and legal environment. Here are some essential items needed to complete a comprehensive estate plan:
- A will
- A revocable living trust if applicable
- A durable power of attorney for financial affairs
- A durable power of attorney for medical decisions
- A living will for end-of-life decisions
While not the all-encompassing form many people believe it is, a will is a necessary part of every estate plan as it documents in detail the method in which you want your assets transferred upon your death. A revocable living trust, or living trust, is an agreement that provides various benefits, including the efficient management of one’s financial affairs in the event of incapacity of the living grantor (the person who created the trust). Upon the grantor’s death, a living trust can be used to transfer assets to loved ones or favorite charities efficiently and outside of the probate process.
Creating a durable power of attorney for both your financial and medical affairs is extremely important. In the event of incapacitation, the durable power of attorney allows your “attorney in fact” to transact business on your behalf or make medical decisions when you cannot. In choosing your attorney in fact, make sure it is someone you trust to carry out your wishes, someone who will not take advantage of you when you are incapacitated, and someone who is willing to serve as your agent. A living will is a tool that allows you to make end-of-life decisions for yourself if you are ever unable to express your wishes.
A living will contain your instructions to your physician and other healthcare providers about the circumstances under which you want life-sustaining treatment provided, withheld, or withdrawn.
Talking with a Gratz Park Private Wealth financial advisor in conjunction with an estate planning attorney and CPA will help create the best strategy for you to address all of these areas and more.
3.Update Your Plan Regularly, Especially When Life, Taxes, and Other Events Change
Like any financial plan, an estate plan is based on the best available information within the time frame the plan was developed. But once an estate plan is created, the work is not over. Life is like a motion picture with dozens of frames changing every second – sometimes subtly, sometimes dramatically. Your estate plan is only reflective of a single frame or a single point in time. Review estate plans regularly – at least once a year – and identify any changes that will impact your plan, including family, personal interests, wealth, and changes in tax law.
Concerning family, have any of the following occurred in the past year?
- You had more children
- Grandchildren were born
- You divorced or married
- A loved-one fell ill and developed special needs
Taxes and Exemptions
Changes in law and tax structures can quickly put an estate plan out of date. Federal and state estate and gift tax laws can change at any time, and we must keep an eye on any upcoming changes to these rules, preferably with the assistance of a tax planning attorney.
One of the first principles of economics is that everything is connected to other things in unseen ways. And every action has a consequence. These are the reasons to review your estate plan regularly. You may not recognize a change, but your expert advisors might.
Life is like a motion picture with dozens of frames changing every second – sometimes subtly, sometimes dramatically. Your estate plan is only reflective of a single frame or a single point in time.
4. Communicate the Plan with the Appropriate Parties
Once your estate plan is created, you can breathe a sigh of relief for tackling a challenging topic. The next important step is to communicate critical plan information to those you have charged with carrying out your plan – your fiduciaries. Your selected fiduciary should know they have been named and have the documents or have a way to gain access to those documents. Your selected fiduciary should know the names and contact information for your estate planning attorney, financial advisor, CPA, and other key players in your estate plan, including physicians. Last, be sure the selected fiduciary knows where to find the contact information for the loved ones or charitable organizations you include in your estate plan.
Don’t keep your wishes from being carried out and leave your wealth and legacy unprotected.
Your estate planning documents should also address access to and ownership of digital assets, such as usernames, passwords, and electronically stored photos, documents, etc.
Finally…
You have worked long and hard to build your estate. An estate plan prepared with careful attention to detail, professionals’ collaborative expertise, and regular review can provide a great deal of comfort to you and those you love. Ensure that your wishes will be carried out, your wealth and legacy preserved by addressing the five key pieces of a successful estate plan. And the sooner you address them, the better. With a proper estate plan, you can ensure that your assets will be applied to the objectives you choose, both now and in the future.