How to Get Started With an Estate Plan

Most people understandably do not know where to start when it comes to estate planning.  Whether you don’t have an estate plan or if your estate plan hasn’t been updated, it is in your interest to meet with a fiduciary CERTIFIED FINANCIAL PLANNER™ Professional.  Estate planning is one of the most important components of a truly comprehensive financial plan.  

Let’s take a look at how to get started with an estate plan.


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Everyone Needs an Estate Plan

Even if you don’t have a significant amount of assets, you need an estate plan.  The bottom line is every adult, regardless of his or her age and level of wealth, can benefit from an estate plan.  

After all, most people own an automobile, have a bank account, have life insurance and/or investments.  Estates consist of each of these assets along with real property.  However, estate planning extends well beyond mere possessions.  

Truly comprehensive estate planning also involves putting the proper procedures in place to prepare for the roadblocks ahead in life, ranging from illness to incapacity and eventually departing this plane of existence.  With the right estate plan in place, you will rest easy knowing you have done everything in your power to ensure your loved ones can maintain their current living standard after you pass away.


Estate Planning Begins With a Will

Your will is one of the most important components of your estate plan.  Your will designates the specific heirs that receive your assets.  An executor is named in the will, providing you with the opportunity to carefully select a trusted individual with the responsibility and power necessary to distribute your estate as you desire and also pay debts on your behalf.  

Fail to establish a will and your property will be transmitted to surviving family members in accordance with the state’s laws pertaining to intestacy.  This is the nightmare scenario as the last thing you want is for the court to determine how your assets will be divided.

Revocable living trusts are available to shift property to loved ones after death.  Living trusts bypass the dreaded probate process, meaning the court will not determine who receives your assets.  It also makes sense to establish a trust to protect assets you choose to leave to your minor children.  This is your opportunity to select a trustee who will adhere to your specific instructions for the management of your assets left to your children.  The trustee you select can be a friend, family member, or a trusted professional such as an attorney or CERTIFIED FINANCIAL PLANNER™ Professional.


Choose Your Beneficiaries

You worked hard for your money so you should seize the opportunity to name specific beneficiaries.  The beneficiaries you designate will receive your assets exactly as you desire.  Whether you want to leave your car to your son, your cottage to your daughter, or your investments to your spouse, now is the time to make those decisions and select beneficiaries as appropriate.  

Be sure to consult with a CERTIFIED FINANCIAL PLANNER™ Professional during this process to ensure the value of your assets are accurate and updated, setting the stage for those assets to be distributed exactly as desired.


Estate Tax Mitigation

If you aren’t careful, the government will receive a sizable chunk of your hard-earned money when you depart this plane of existence.  Your CERTIFIED FINANCIAL PLANNER™ Professional’s assistance will prove invaluable in helping you reduce your estate tax burden.  

This professional can explain the use of exemptions, unused exemptions, and the other nuances of tax mitigation strategies in the context of estate planning.  The proper tax mitigation planning has the potential to save your relatives and other beneficiaries thousands or even tens of thousands of dollars.


Durable Power of Attorney and Advanced Healthcare Directives

Estate planning is not strictly limited to providing care for survivors.  Estate planning also ensures a trusted individual can manage your finances through a durable power of attorney should you become too ill or incapacitated to do so yourself.  It is also in your interest to establish an advanced health care directive that selects a health care agent to make decisions on your behalf when you are nearing death and too sick to verbalize your desires.


Organizing Paper and Digital Files

As is often said, the devil is in the details.  If your paperwork or digital files are a mess, doling out your assets upon death will prove that much more challenging.  Do your loved ones and other beneficiaries a favor by organizing these files today.  

A CERTIFIED FINANCIAL PLANNER™ Professional will help you get all of the necessary paperwork in the proper order so your family doesn’t have to piece together the puzzle of your accounts, assets, and other estate-related documents after you pass away.  Now is the time to organize the documents your executor will require to smoothly shift your assets to selected beneficiaries.  

As an example, it will certainly help if you provide your insurance policies, pension paperwork, bank statements, burial plot deed, and paperwork pertaining to investments to your executor as soon as possible.  Continue to update your asset list along with the names and contact information of professionals who help you with your estate planning.  Make sure your executor can easily access your information.

Paper documentation is certainly important yet digital documentation and assets also matter a great deal in the context of comprehensive estate planning.  Do not overlook your digital assets.  If you have web-based stock trading accounts or other digital accounts, maintain a list of those accounts along with your usernames and passwords so your executor can access them with ease. 


Review Your Estate Plan Every Half-decade

Estate planning is dynamic rather than static, meaning it will change as time moves forward.  Major life events such as the death of a spouse, divorce, marriage, and retirement have the potential to significantly change your estate plan.  

Furthermore, Congress has the potential to alter estate tax law so it is in your interest to meet with your CERTIFIED FINANCIAL PLANNER™ Professional and estate planning specialist at least once every half-decade to update your assets and related estate planning paperwork, ultimately ensuring your assets are distributed exactly as desired.

At Prism Planning Partners, we are CERTIFIED FINANCIAL PLANNER™️ Professionals committed to facilitating important questions so that we can help you explore all of your opportunities. We offer a broad array of financial planning and consulting services for our clients-including retirement, investment, and estate planning.

Contact us today and let us illuminate your possibilities!


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Prism Planning Partners, LLC dba Prism Planning Partners is a Registered Investment Adviser. This article was produced by Paladin Digital Marketing, an entity unrelated to Prism Planning Partners and may not necessarily reflect the expertise of this financial advisor. This publication is not intended to provide investment advice and is intended for your information only. Opinions and forward-looking statements expressed are subject to change without notice. Information based upon third-party sources and data are believed to be accurate and reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All domestic and international rights are reserved. No part of this publication including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Prism Planning Partners. Neither Prism Planning Partners, nor its investment advisor representatives provide legal or tax advice. Please be advised to consult your investment advisor, attorney or tax professional before making any investment decisions. 
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