The “What” and “Why” Behind Estate Planning

Many people postpone the planning of their estates because they assume that estate planning is only for the affluent. Others may think that estate planning is similar to tax planning, which can always be done “later.” In some cases, estate planning may be put on the back burner because it is a reminder of one’s own mortality. But, a properly structured estate plan is necessary if you wish to direct the distribution of your assets during your lifetime and after your death, as well as choose guardians for your minor children or plan future care for other dependents.

Getting Started
First, select a professional estate planning team. This initial step may be difficult due to having to share your personal thoughts, fears, wishes, and financial information with others. Therefore, it can be helpful to include a trusted advisor on your estate planning team. Certainly, your attorney will play an instrumental role in preparing any necessary legal documents. However, your financial professional, bank trust officer, insurance professional, or accountant may also become involved. Generally, the size and complexity of your estate will dictate the complexity of the estate planning process.

Initially, your estate planning team will focus on your current financial status to better assess where you stand today in order to optimally plan for the future. Consequently, you will need to gather all the necessary documents detailing current and future income, property ownership, insurance, and established legal arrangements. The following list contains some of the information you will be asked to provide:

  • Current income from employment and all investments.
  • Investment documents, certificates, statements, passbooks, etc.
  • All retirement benefits: Social Security (including survivors’ benefits), Individual Retirement Accounts (IRAs), defined benefit (pension) and defined contribution (401(k) or other workplace retirement) plans.
  • Any expected deferred compensation.
  • Deeds to primary and secondary residences.
  • Life insurance policies in which you are the owner, the insured, or the beneficiary.
  • A list of all personal property.
  • Current and anticipated debts and obligations, including mortgage and loan balances, real estate liens, tax liability, consumer debts, and estimates of funeral costs and estate settlement expenses.
  • Your will, if you have one.
  • Trust agreements, if any.

A complete analysis can begin once you have gathered this information, which will allow you to take a closer look at your family’s needs. You may want to consider the following questions:

  • How will your family’s overall cost-of-living change in the years ahead?
  • Who will take care of your minor children if something happens to you?
  • Who will make medical and financial decisions on your behalf if you become incapacitated due to illness or injury?
  • What are the projected educational expenses for your children?
  • Is there a family member who needs special care or medical attention?
  • How will estate taxes affect your assets?

Keep an Open Mind
The careful planning of an estate requires you to share personal and financial information with one or more professional advisors. This information provides your estate planning team with the necessary tools to design an estate plan that will help to fulfill your specific goals and wishes for asset control and distribution.

Once you have created your estate plan, remember, as your circumstances change over time, your estate plan may need to change, as well. Regular reviews can help ensure that your estate plan is on track to meet your current and future objectives.


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