Estate planning basics

by the Editor, SeniorInsider | May 31, 2011

Few of us actually look forward to estate planning, since dividing up our assets tends to remind us—in a not particularly pleasant way—of our own mortality. When thinking about estate planning, the most important way to get through it is to remind ourselves that responsible estate planning means we are able to give our assets to exactly who we want to, and know that the law will uphold those wishes. A second goal of estate planning is to keep the state from siphoning off a substantial portion of your estate before your heirs ever see their inheritance. Finally there is the satisfaction you can have from knowing your affairs are in good order and won’t be a nightmare for loved ones to deal with.

First Steps of Estate Planning


The first thing you must do before you even contact an estate planning attorney, is to take stock of all your assets. Get a notebook and start writing down all your property, investments, bank accounts, retirement accounts, insurance policies, personal possessions and business interests. Most people are quite surprised to find that the list is considerably longer than they had anticipated—meaning most of us have more “stuff” than we think we do.

Next you will need to decide who you want to inherit your possessions, and who you would trust to handle all your business affairs and even your medical care should you become incapacitated. Most all of us want to leave some sort of legacy to our children, grandchildren or other loved ones, whether that consists of money, a business, or a personal heirloom. We want to not only leave our heirs something of value to help them along in their own life, but also to leave them personal possessions which are a part of us and will remind them of us long after we are gone. For all these reasons, it’s important to choose your heirs and beneficiaries carefully.

Once you have decided on you your specific bequests, you may want to discuss the particulars of your estate planning with those who are named in your trust or will—after all, the sooner you outline your eventual intentions to family and friends, the less chance there will be major disagreements when you’re gone.

What is Included in Estate Planning?


Most good estate plans will include a will, a power of attorney, a living will or health care proxy, and, depending on your specific financial situation, a trust. Trust and will preparation generally require the inclusion of an estate planning attorney during the process because an experienced estate attorney will be fully cognizant of all federal and state laws which will govern your specific estate. Even if you have a properly and legally set-up trust, it can still be important to have a will, especially if you have minor children. Should you die without a will—called “intestate”—you can end up costing your heirs a considerable amount of money and trouble.

Be careful of simply leaving all your assets to your spouse. First of all, you forfeit the use of your estate tax exemption, while also increasing your spouse’s taxable estate. Further down the road, this means that your children will be the ones who end up paying exorbitant estate taxes when your spouse dies. Placing the entire burden of estate planning on your spouse is not only unfair, it doesn’t allow you to ensure your personal possessions and assets go directly to the person you want them to go to.

When engaging in estate planning, your goal and the goal of your estate planning lawyer will be to put specific conditions on how and when your assets are distributed following your death, to reduce estate and gift taxes, to protect your estate from creditors and lawsuits and to distribute your assets quickly and efficiently, sparing your heirs the cost, delays and public nature of probate court. Estate planning may not be at the top of your list of things you want to do, but you may be surprised at how satisfied you feel once it is done.

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