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Seven Steps to a Successful Estate Plan

Do you need an estate plan? For those with substantial assets, estate planning is essential to preserve and protect wealth for future generations and to minimize estate taxes. However, even if your net worth is more modest and death taxes are less of a concern, proper estate planning allows you to control the distribution of your property, ensure that those you select will care for your children, avoid unnecessary court proceedings and reduce the chances of family disputes.

A good estate plan is a map left for your loved ones who continue on the journey of life without you. Taking the time to complete an estate plan is an act of caring and concern for those you leave behind. Attorney William R. Burford shares seven steps to a successful estate plan that will provide a legacy of stability and certainty for your loved ones.

1. Contemplate Life Without You

Take a few minutes to contemplate your family without you. If you died tomorrow, what would happen to your loved ones? Along with grieving, your family may face many important financial decisions:

  • Would your survivors know what assets are left for them, where to find the necessary documents, whom to call and what to do? 
  • Do you know what legal proceedings would be required or their cost? 
  • If you have children, do you know who would care for them? 
  • Would there be funds available to support them? 
  • Do you know to whom your property would pass? 

Answers exist to these questions, although they may or may not be what you would expect or intend. You will leave behind a legacy when you die. Will it be one of stability and security or disorder and worry? The choice is yours.

2. Commit to Action


Proper estate planning requires a commitment. If you honestly consider the consequences of your death, it should be apparent that you either know what will happen to your family when you die or you're not sure. Do you care? With knowledge comes responsibility. Are you willing to educate yourself on the legalities of creating a valid estate plan or do you wish to pay an expert to create the necessary legal documents? Good intentions are worth little. Action is essential.

3. Collect Information

Good decision-making is based on good information. Whether your estate is large or small, or somewhere in between, proper estate planning requires consideration of your assets and liabilities, your family situation and the specific needs of various family members. A will and other legal instruments are critically important components of an estate plan, but good planning involves much more than signing a few documents. The goal is to assure that you protect the emotional and physical well-being of your loved ones by leaving a legacy of stability and security.

 

To provide the protection your loved ones need, you will need an accurate picture of your present financial resources and future needs. If you have not completed an estate plan before, or have not reviewed your plan in several years, you may lack adequate life insurance or have outdated or incorrect beneficiary designations on insurance policies, retirement accounts or employment benefits. Collecting basic financial information will allow for the creation of an estate plan that will take care of your family if you are no longer able to do so.

4. Consider the Alternatives

Once you have committed to action and collected the necessary family and financial information, you will be faced with many questions and a few basic decisions. Sometimes these decisions are simple. For example, new parents may wish to assure that their property passes to the other spouse if one of them dies and is available for their child if they both pass away. Even a simple plan, however, will usually require consideration of an array of issues and alternatives.

  • How is title to your property held?
  • Should property be held in joint tenancy?
  • Should you establish a living trust?
  • What is probate?
  • What are the costs and benefits of a living trust?
  • Should your assets be left outright to a child or spouse?
  • Who should act as your executor or successor trustee?
  • Should you appoint a single trustee or co-trustees?
  • When should you consider a bank or other professional fiduciary?
  • How can you assure that your beneficiaries are treated fairly?


These are just a few of the flurry of questions that may need to be addressed in constructing a complete estate plan. It is at this stage that a qualified and experienced estate planning lawyer can add significant value by narrowing or expanding the inquiry, asking the right questions, avoiding common and often costly mistakes and offering solutions to potential problems.

5. Construct the Plan

An estate plan consists of a variety of written documents. Having considered the alternatives, your choices are committed to paper. As with any legal instrument, a will, trust or beneficiary designation must be clear and unambiguous. Make sure that your estate planning documents accurately express your wishes. An attorney can draft and explain the necessary legal instruments or, if you use software programs or forms to prepare planning documents, hire a lawyer to review them for you. A single word used without careful consideration or a lack of clarity in one sentence can lead to a dispute and costly litigation. The words in a will or trust stand by themselves. You will not be there to explain what you meant after you're gone.

6. Complete Your Documents

Unlike fine wine, unsigned wills and trusts do not get better with age. An unsigned will is not a valid legal instrument. Having proceeded this far, you must now complete the process by signing your documents and following the necessary legal formalities to assure that they are valid and effective. Estate planning lawyers often see clients who go to the trouble and expense of having legal instruments drafted, but then ignore calls and reminders to review and sign their documents. Remember that you have accepted responsibility for the well-being of your loved ones. Follow-through is critical the creation of an effective estate plan.

7. Communicate

A will or trust that no one can find will not govern the disposition of your estate. Instead, the law will decide who receives your property. Communicate to family members, a friend or business partner, and your accountant or financial advisor the location of your estate planning and other important financial documents. Although you may not wish to share the specifics of your estate plan with anyone else while you are living, your loved ones or other trusted persons should know where your important legal and financial instruments are kept.

If you follow these seven steps, you will successfully create an effective estate plan that will provide for and protect your family following your death. Knowing that you will leave a legacy of stability and security, go forward and live life to the fullest.

 

William R. Burford is an attorney with the law firm of Rutter, Hobbs & Davidoff Incorporated. He can be reached at (310) 286-1700 or visit the Web site www.rutterhobbs.com.

  


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