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Estate Planning Fundamentals You Need to Know

“It's easy to put off because it can be morbid and often doesn't kick in until late in our lives, but it's an important piece to be thinking about for those of us who want to make sure our families are provided for.”


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First, you’ll need a will, which is the basic tool for estate planning. It prevents two very expensive and stressful issues: managing your wishes for your estate and possibly losing hefty sums through unnecessary taxes. However, that’s just the start.

You may also need trusts, depending on your family’s situation. You’ll want to have life insurance policies with beneficiaries. Life insurance proceeds are not governed by the will, so your heirs will receive any funds directly. Benefits from retirement funds fall into this same category. That’s why making sure that your beneficiary designations are up-to-date, is so important.

Working with a team of trusted advisors, is productive for most people. Remember that your estate plan touches on taxes and investments as well as your will, power of attorney and medical directive. Consider these steps to get your entire estate plan in order:

  1. Gather personal data about yourself and your family,

  2. Create a balance sheet of your assets and liabilities,

  3. Review your will and any existing trusts,

  4. Evaluate all estate tax options, such as the best method of disposing of your share of community property—considering the unlimited marital deduction and the use of tax-sheltered trusts,

  5. Consider the optimal way to distribute your retirement plan benefits,

  6. Calculate potential estate, gift and income tax liabilities,

  7. Determine the availability of liquid assets to meet potential estate expenses and taxes.

Once you have all this information together, you and your estate planning attorney can begin to put together a plan that will serve you and your family. Remember that an estate plan is not a one-and-done document. Over time, as your life and tax laws change, you’ll need to review the estate plan,  which includes beneficiary designations.

Resource: Brainerd Dispatch (Aug. 3, 2018) “Wealth Column: Estate Planning Basics”

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