The Basic Estate Planning Process

You've finally decided to take action and get your estate plan in order.  So, how do you get started?  What should you be thinking about?  Here is the basic process that will make it easier for you, your spouse, and your attorney to efficiently and effectively execute your estate planning goals.

Inventory Your Estate.  You need to take an inventory of your estate, so you know what you own, what may be passed on to your beneficiaries, and if there is any potential estate tax liability.  List everything that you own or have an interest in, such as:  bank accounts, stocks, real estate, life insurance, retirement accounts, cars, personal property, heirlooms, etc.  Write down the values for these items to the best of your knowledge.  Also, write down how these items are owned, i.e. by you alone vs. with someone else.

Identify Your Estate Planning Goals.  Estate planning may seem intimidating at first, but once you have a clear picture of what you want to accomplish, estate planning gets much easier.  Get out a piece of paper and start writing down your goals.  There's the obvious goals such as providing for a spouse or children - what are their needs?  Maybe you have concerns related to a second marriage or a blended family.  Maybe you want to avoid taxes or protect assets from creditors.  Maybe you want to have a plan in place if you become sick or incapacitated.  Maybe you want to keep a business in the family or make sure certain assets go to certain people.  Maybe you want to provide for charity.  Maybe you want to avoid probate or make sure the administration of your estate runs smoothly.  These are just a few of the countless things that people may wish to accomplish through estate planning.

Prioritize Your Goals.  Once you have listed your goals, your next task is to prioritize those goals.  Which goals are the most important to you?  If the makeup of your estate changes significantly, what are your desired distribution priorities?  Who absolutely must inherit from you?  Is tax avoidance more important than probate avoidance?  Some of your goals may be competing interests, so it is necessary to decide which has a higher priority in your mind. 

Find the Right Estate Planning Tools.  Good news!  There are a very large number of estate planning tools out there.  The trick is to find the estate planning tool that makes the most sense for your situation, whether it is a Will, Trust, Deed, Power of Attorney, Healthcare Directive, Insurance, etc.  The list goes on and on.  Some are simple.  Some are complicated.  Some are cheap.  Some are more expensive.  But, as long your estate planning goals are legal, chances are you can make them happen. 

Implement Your Estate Plan.  Once you've figured out your estate planning goals and have decided which estate planning tools to use, the next step is to actually implement your plan.  This means you need to draft and execute the appropriate documents.  You need to make sure your property is titled correctly and transferred to the right accounts.  You also need to make sure your beneficiary designations in various accounts and property coincide with your estate plan.

Revisit the Plan.  You will want to revisit your plan from time to time as your circumstances evolve.  Some triggering circumstances include:  changes to the makeup of your estate, divorce, death of spouse or beneficiaries, birth of a child, etc.  These types of events may alter your goals and may make your already-established estate plan ineffective.

Remember that estate planning is not a one-time event, but is a lifelong process.  It is a good idea to start early and get the framework in place, so that it will be less work to tweak the plan later on.  You may be able to proceed on your own, but it is usually a good idea to consult with an estate planning attorney for guidance, especially when figuring out which estate planning tools will best serve your situation.