Key Steps to Making a Successful Estate Plan

There are a number of steps involved in making a successful estate plan, but the most important one is finding a skilled estate planning attorney who will provide you with effective, empathic guidance and advice. As with so many other important courses of action, making a successful estate plan requires the help of a knowledgeable professional, one who will pay close attention to your particular situation, and customize your plan accordingly.

While consulting with an experienced estate planning attorney is essential, it’s helpful to examine the key steps involved in the process before a consultation so that you have some idea of what will be covered and can begin jotting down some of your questions and concerns.

1. Create, Fill Out, and Sign Foundational Documents

Such essential documents include durable power of attorney, advance directive, health care proxy, HIPAA release form, a last will & testament and, in many cases, a trust. These documents are designed to cover important matters, such as who will inherit your assets, who your personal representative and guardian for your minor children will be, and who will take over your financial/legal responsibilities and healthcare decisions if you should become incapacitated.

2. Communicate Your Decisions Verbally to Those Who Need to Know

Since one of the major reasons you’re creating an estate plan is to make life easier for your beneficiaries, it is critical that you inform them of your wishes, both in terms of how you want your future healthcare handled, and in terms of how you want your assets distributed when you die.

No good will come of surprising them with your decisions when you are no longer around to defend them and the last thing you want is to create family disputes or resentments. Also, make sure your personal representative knows they have been chosen as such, the basic details of your estate, and what their duties will be.

3. Avoid Probate

Probate, as the legal process of validating your will through the courts, can be a slow, costly process, especially for high-net-worth individuals. Also troubling to some people, probate is a matter of public record. For these reasons, many people are eager to avoid probate to keep estate costs down, to make sure their beneficiaries inherit quickly, and to protect their family’s privacy. Fortunately, this can all be accomplished by creating a living trust to hold the targeted funds.

4. Plan Your Gift Giving So It Achieves Your Goals

Your estate planning attorney will help you to do this, taking into account the age, maturity level, and spending habits of gift recipients, and also paying attention to the tax consequences of your actions. Your lawyer may, for example, advise you to leave money in trust for a child until they reach a certain age or receive a college diploma or to leave property rather than a cash gift since the former is more likely to become a legacy.

5. Organize and Record Your Assets and Your Important Papers

Make sure that you know where important documents, like birth certificates and Social Security cards are, and make sure to share this information, as well as essential passwords and codes, including those needed for digital assets, with at least one other person.

6. Pay Attention to Tax Considerations

This is something your estate planning attorney will be savvy about. A professional in the know can help you to avoid estate taxes by establishing an irrevocable trust and reduce other taxes by wise planning.

7. Protect Your Assets and Your Heirs’ With Trusts for Particular Purposes

Trusts can protect your assets from excessive taxation and probate and help you qualify for government benefits if you require long-term nursing care. They can also preserve the eligibility of a special needs child for Medicaid and Social Security Disability Insurance while providing them with funds to make their life more comfortable.

Trusts can also be used to protect your assets from predatory creditors, heirs’ ex-spouses, or liability lawsuits and save a spendthrift beneficiary from going through their inheritance far too quickly. They can even provide for your beloved pet if they outlive you.

8. Create a Workable Business Succession Plan

Although not every person owns a business, some proud business owners need a strong estate planning attorney to help them develop a viable business succession plan so that their business can continue after their retirement or death.

Once You Have Made a Successful Estate Plan — Plan to Keep It Up-to-Date

No matter how well-crafted your estate plan is, it should be re-evaluated on a regular basis. Your estate planning attorney will recommend revisiting your plan every 2-3 years or when a major life event (e.g. a birth, marriage, divorce, death) requires its alteration. You should also remember to update the beneficiaries on your retirement plans and bank accounts as needed.

You may be pleasantly surprised to find that making a successful estate plan is not the ordeal you thought it would be, but rather a reassuring activity that helps you sleep more easily.