Estate Planning Graphic

By Andrea McKinney, CFP® – Senior Vice President & Wealth Management Advisor

Many individuals believe that estate planning is only for the very wealthy and required to save on estate taxes. However, an estate plan can be so much more.

A good estate plan is your family’s roadmap if you are unable to deliver it in person. You can even include a personal letter in your estate plan. This letter can be about your parents and grandparents, or other members of your family. You may want to describe how they earned their money or how they hope to be remembered. Whatever the reasoning, an estate plan should be customized to your specific, unique goals.

Here are some questions you should ask yourself to determine whether an estate plan is right for you:

  • Do you want to determine who will inherit your assets and when?
  • How much will your heirs receive?
  • At what age do you want your heirs to receive the funds?
  • Do you want your heirs to receive it all at once?
  • Will your Trustee need special instructions regarding specific assets or stock concentrations?
  • Who will take care of you if you become incompetent? Who will take care of your finances?
  • Who will take care of your minor children?

You may choose to leave your assets in a trust for some heirs yet distribute assets outright for others. A trust can provide for the care of a loved one without overwhelming them with a large sum of money. The trust provisions can be customized to your wants and needs, for example, when a beneficiary is to receive distributions and for what purposes.

A trust should be personal. Great care should be taken to address each beneficiary’s specific situation. An added benefit to leaving your heirs money in a trust is that it can be protected from creditors, complex marriages, and outside pressures. Additionally, you can address problematic issues with beneficiaries such as drug or alcohol abuse and financial irresponsibility. Many families today have children from multiple marriages. Addressing how they will receive money and assets will go a long way to reduce any conflicts following your death.

In some situations, you may want to establish a charitable fund to benefit certain types of organizations or a specific charity that means a lot to you. Perhaps you want to establish a scholarship fund at your alma mater or leave a percentage to your favorite charity. This too can be accomplished in your estate plan.

Personal property carries more significance than you might think. It is a good idea to create a separate list of your personal property and who is to receive family heirlooms or even grandfather’s fishing rod or mom’s favorite teapot. A great deal of heartache and resentment can be avoided by preparing this list and leaving it with the person you have named as Trustee of your estate. The plan can certainly provide for the disposition of money, but that is usually the “easy” part.

The estate plan addresses what will happen with your family home and other property you may own. Do you want it to be sold? Should an heir have the option to purchase? Many people have even incorporated special provisions to ensure their pets are well cared for should something happen to them.

What if you can no longer care for yourself or live alone? Do you want to stay at home and have a helper come in or do you prefer assisted living? If you become incompetent, who will make decisions on your behalf?

Make sure your wishes are known by putting this in writing. As part of this process, you will also create a living will and health care directive.

Some of these topics are not always fun to think about, but it is critically important that you make the decisions rather than leaving them to chance. An estate plan allows you to decide who will handle your affairs and ensure that they will be handled properly. Of course, estate planning can avoid probate and save estate tax. A well drafted estate plan, however, should aim to establish or strengthen family harmony, protect your loved ones, and can provide the gift of peace of mind to your heirs.