An estate plan allows you to determine how your wealth is managed and distributed. This includes growth plans, investment portfolios, and wishes after death. You can work with firms offering financial planning services to create a draft that reflects your goals and wishes. Here’s how to create an estate plan:
Outline Your Goals
When you make an estate plan, you must decide what you want to achieve. Your goals may include keeping your wealth to specific family members after you die. Other goals include minimizing estate taxes, planning for incapacitation and disability, and specifying asset distribution. Seek professional financial planning services to help you define your objectives and wishes and put them in legal terms.
Determine beneficiaries, care providers for your children and dependents, and how much is needed for education. Specify who manages your financial affairs and those responsible for asset distribution. Leading financial planners can help you explore estate distribution planning, life insurance and 529 plans, charitable giving, and generational wealth transfer.
List Your Assets and Liabilities
Creating a comprehensive estate plan involves assessing and understanding the value of your assets. List all assets, including real estate, investments, financial accounts, bank accounts, retirement funds, personal property, digital assets, and business interests. Determine the monetary value of all assets, focusing on tax liabilities and liquid assets protection and transfer opportunities. Identify your debts and liabilities, including mortgages, insurance premiums, loans, and other liabilities.
Draft Your Estate Plan Documents
Estate planning documents include a will, power of attorney, healthcare directive, trust, and beneficiary designations. The will or testament outlines asset distribution following death. Power of attorney documents names the person appointed to handle financial affairs in case of incapacitation.
Healthcare directives or living wills mention medical care preferences, while trusts hold and distribute your assets according to your wishes. Beneficiary designations determine who inherits funds from your life insurance policy, retirement accounts, POD bank accounts, and assets outside your will.
Consult a Financial Planner
Working with a financial planning firm helps you navigate the legal complexities of estate planning. The planner can help you review, fine-tune, and adjust your plan, complying with regulatory requirements and your wishes. They also help you understand financial implications, allowing you to align them with your financial goals. Whether you want to name specific executors for the estate or guardians for your dependents, professional planners are experienced in such practices.
Review and Update Regularly
Your life circumstances can change, calling for adjustments to your estate plan. Adjustments may include the new beneficiaries if you have another child or grandchild. Regularly reviewing and updating when needed allows you to maintain a plan that reflects your goals and wishes.
Review the documents after any major live event, such as marriage, divorce, the birth of a child, or significant financial changes. You should also review beneficiary designations and verify that the documents are current.
Seek Professional Financial Planning Services Today
A financial planner provides professional insight into creating and executing your estate plan. Financial planners are skilled in these areas, whether you seek to minimize taxes or prevent inheritance disputes. Consult a reputable wealth enhancement firm today to learn about estate plans and other financial planning services.
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