Introduction to Estate Planning

Introduction to Estate Planning

Estate planning is decision making. The process can be relatively simple or quite complex, depending on many factors. Most of us put off any estate planning until we see friends and close relatives pass away, or read horror stories about someone who lost her life savings through fraud.

In general, the process involves:

  • Choosing how your future health-care decisions will be made when and if you are unable to make informed decisions;
  • Deciding how you want your property distributed upon your death;
  • Reviewing your future income and expenses.

With inflation (and even deflation), changes in family structure, and new laws passed each year; you should review your estate plan on an annual basis.

Estate administration is the process of winding up a person’s affairs at death. It is the executor’s responsibility to ensure that the trust agreement provisions are followed. There are factors for executors and trustees to consider, and many pitfalls to avoid.

Who needs estate planning? 

Individuals who should have an awareness of different aspects of estate planning include just about everyone.

If you have minor children, you should be concerned with naming guardians to take care of them, and need to execute a will to nominate guardians.

If you have an item of property you would like to leave to a particular person, besides giving it to him immediately or carving his initials on it, you should execute a will or place the item in a trust for his future enjoyment.

If you are named as an executor in a will, agent on a power of attorney, or trustee of a trust agreement, you will need an overview of your authority and responsibilities.

What does the estate planning process consist of?

Planning your personal and financial affairs is a benefit both to yourself and your family.

Everyone has different goals in life. The same is true for estate planning. Once you have assembled key documents and reviewed your current financial affairs, you should select the goals and objectives that are most important to you.

Here are 4 points to consider during the planning phase:

  1. Many people put off estate planning because they believe it only involves saving taxes or avoiding probate. Estate planning also involves your future financial and health affairs, guardians for minors, asset protection, and various other issues.
  1. Estate planning is for everyone, not just the wealthy.
  1. Do no be fooled into thinking that a fully funded revocable trust (living trust) will solve all of your estate concerns.
  1. Select, attorneys, accountants, and insurance agents who take the time to listen to your needs and charge reasonable prices for their services.

Below are 5 steps to be followed when planning your financial and health-care future:

  1. Identify your property
  1. Establish objectives
  1. Select your advisors
  1. Draft and implement a plan
  1. Perform an annual review

Take extra time and use caution when choosing an executor, trustee, or agent on a power of attorney. The individuals best suited for these offices are responsible, mature, have the time to assume the duties, and are trustworthy. You should decide who will make health-care and financial decisions for you if there comes a time when you cannot make your own decisions.

In addition, if there are individuals dependent on you, such as minor children or aged parents proper planning today may save thousands of dollars in accounting and legal fees at a later date. 

For more information on how the Onisko & Scholz team can help you with the planning and administration of your estate, contact us today.

By |2016-02-16T22:35:19+00:00February 16th, 2016|cpa, cpa blog, estate|0 Comments

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