Essentials
Wealth transfer essentials
Chapter 1, Why do I need an estate plan?

Estate planning is, for most people, challenging at best. It involves grappling with mortality, understanding legal terms and concepts, and addressing sensitive family issues.

One of the reasons the process is so daunting is that most people view estate planning in isolation, that is, they think of it as involving things that happen only after they’ve died. Viewed more comprehensively, estate planning is really just one component of a properly structured financial plan. Good planning goes beyond finances, cash flow, and investments, to provide for your family in the long-term and short-term.

Why have an estate plan? The reasons begin with providing for a spouse, partner, or children, or other family members and aligning your wealth transfer with your charitable vision. But there are other things to consider, such as avoiding probate or reducing the time and cost of estate settlement for your heirs and making sure that you are taken care of as you age.

See the chart below for estate planning best practices to consider.

Infographic outlining common estate planning best practices and how to avoid them. For details, click "view transcript."

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Common estate planning best practices

Avoid settlement delays

Settling any estate can be time-consuming, but an ambiguous plan can be an extra burden on loved ones.

Best practices

  • With the assistance of an experienced estate planning attorney, spell out your desires clearly and document them in writing
  • Prepare for the potential of being unable to handle your own affairs
  • Consider carefully who is assigned fiduciary duties, such as executor or trustee

Benefits

  • Clear direction
  • Efficient distributions
  • Managed risk

Reduce family dynamics issues

While there’s always the potential for disharmony in a family, times of crisis are especially trying.

Best practices

  • Involve your family in the estate planning process
  • Discuss your planning intentions with beneficiaries and others who may be impacted
  • Understand the time and skill set required of those you appoint to fiduciary roles

Benefits

  • Knowledge of your desires and intent
  • Multigenerational involvement
  • Culture of trust for your family

Help prevent unnecessary tax liability

Failure to properly structure your plan can lead to a less-than-efficient transfer of assets.

Best practices

  • Engage a well-credentialed and experienced attorney and fiduciary to build your plan
  • Compare tax outcomes from multiple scenarios
  • Review your plan annually and adapt it as your circumstances change

Benefits

  • Maximum impact on beneficiaries
  • Long-term approach
  • Goals-based outcomes

Create a contingency plan

If you are no longer able to make decisions on your own, who will be authorized to make them for you?

Best practices

  • Talk with your estate planning attorney about naming a contingent trustee (individual or corporation) if you are incapacitated
  • Choose someone you know is willing to serve and who will avoid potential conflicts of interest
  • Also talk with your estate planning attorney about other advance planning tools, such as powers of attorney and health care directives

Benefits

  • Helps protect your financial security
  • Ensures Continuity
  • Provides comfort that your wishes are followed