Getting Started With Estate Planning

Ashley Morgan

Director of Financial Education

Last Updated
November 28, 2022

5 Steps to Help You Get Up and Running

If you’ve never had an estate plan, getting started can seem like an overwhelming task. However, without an estate plan in place, your family and retirement savings are at risk. The worst thing you can do is let the fear of imperfection keep you from taking action. You can always make changes to your plan as your life and situation evolve over time, but don’t let the fear of making a mistake keep you from completing this important financial task.

The best way to get started is by taking it one step at a time.

Step #1 – Talk with your wealth manager and estate planning attorney.

The most efficient way to ensure your estate plan is in line with your overall financial goals is by allowing your wealth manager and estate planning attorney to collaborate as early in the process as possible. You’ve already worked with your wealth manager to establish your goals and implement a financial plan. Your estate planning attorney can leverage this work in drafting an initial set of documents for your review. You may be surprised to discover how much estate planning groundwork you’ve already completed.

Step #2 – Determine what documents you need.

Is a will sufficient to meet your needs, or would a trust be a better alternative? What powers of attorney should you have in place? What’s the best way to designate guardians for your children? These questions can be answered with the help of a qualified estate planning attorney. Your wealth manager will also want to weigh in on the process to help ensure you’ve covered all your bases.

Consider the following estate planning documents.

  • WillA will is the main estate planning document everyone should have in place. Not only does a will distribute assets according to your wishes but it can also help minimize estate taxes and legal challenges to your estate.
  • Revocable living trust – Establishing a trust can be an effective way to avoid probate, which is typically an expensive and time-consuming process. A trust can also provide significant tax savings and privacy for your heirs.

In order for a trust to be effective, it must own assets, which means it’s important to retitle assets and accounts in the name of the trust. Your wealth manager can help you identify accounts and provide tips to ensure they’re titled correctly.

  • Guardianship designations – While many wills include guardianship designations, it’s an important enough element to call out separately. If you don’t formally designate who will care for your children should something happen to you, a court may give custody to a family member you wouldn’t have chosen.
  • Durable power of attorneyA durable power of attorney is a legal document that designates an individual to act on your behalf should you become incapacitated and unable to make decisions on your own.
  • Healthcare power of attorney – Similar to a durable power of attorney, a healthcare power of attorney designates an individual to make medical decisions on your behalf should you become incapacitated and unable to do so on your own.
  • Letter of intent – While not a legally binding document, a letter of intent can be used to inform your executor, a beneficiary or the court of your intentions following your death. People also use these letters to express their funeral wishes or to designate how a special asset should be handled.

Step #3 – Review your beneficiaries.

If you don’t’ have a revocable living trust, it’s important to review your account beneficiaries on a regular basis to ensure they remain accurate. This is especially important if you’ve recently experienced a major life event, such as getting married, getting divorced, having a child, losing a spouse, etc.

Step #4 – Make a plan for digital assets.

If you don’t have a plan in place for your digital assets (photos, videos, social media accounts, purchased music, credit card points, etc.), your loved ones may be unable to access them following your death. Your estate plan is a great place to designate who should have access to your digital assets and how to access those assets in a secure manner.

Step #5 – Revisit your plan on a regular basis.

Be sure to regularly review and update your estate plan as your life and financial situation evolve over time. Your wealth manager can help you identify any changes that should be made to your plan as your life progresses.

If you’d like help getting started with estate planning, Creative Planning is here for you. Our affiliate, Creative Planning Legal, is one of the largest estate planning law firms in the country, with attorneys licensed to practice in a variety of states. Regardless of your specific situation, we can help prepare a custom estate plan to meet your needs. For help with your estate planning, or with any other financial matter, schedule a call with a member of our team.

 

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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