What is Estate Planning?
Estate planning involves developing a strategy to deal with your assets and investments after you die. It aims to provide peace of mind for you and your loved ones, ensuring that your assets are passed on to your beneficiaries in the most simple and effective way. Few people actually have estate plans in place. Even lawyers and financial professionals who know better don’t get around to planning their estates. For many people “Estate Planning” is really just a simple will written so they don’t have to wrestle with many of the real issues of their estates.
Estate planning is a lot like planning for nursing home care. Nobody really wants to do the planning, because it requires one to contemplate unpleasant possibilities. In addition, once estate planning begins, anyone who has more than a simple estate and an ideal family must deal with some difficult questions.
Hurdles in Estate Planing and ways to overcome
1. Don’t plan for the longest term.
Many people go into estate planning with the idea that they are making permanent decisions that will be locked in forever. They find it difficult to resolve issues based on today’s knowledge and circumstances. The prospect of a decision that locks one’s heirs in for decades can be paralyzing. As a result, they make no decisions, and the plan doesn’t get done. A better approach is to consider only the next five years. Many things will change in that time, and the estate plan will need to be revised.
2. Recognize that no family is normal.
Some people do not go to an estate planner because they do not want to talk about the family black sheep or other problems. Others cannot think of a solution on their own, so they don’t draw up any plan. Whatever your family situation, an experienced estate planner has heard something similar already. As a result, the planner probably has some proposals for you to consider. An imperfect family or an embarrassing situation is no reason to compound problems by neglecting an estate plan.
3. Look for alternatives and creative solutions.
Many estate planning professionals simply ask clients how they want the property divided among their children. They are given the choice between leaving the property equally or according to financial need. That leaves clients with the impression that there can be only one division, and the decision has to be made today. An alternative in this case is to split most of the estate equally, and put the rest in a trust. The trustee decides over time how to distribute the wealth based on who consistently has the greater need or has the need at a specific time.
4. Meet separately with the planner.
Spouse should meet separately with the estate planner at least once each. One spouse might be willing to express some views and thoughts in such a session that would not be made in front of the other spouse. In fact, some people avoid estate planning because they are hesitant to air known differences with their spouses. After separate meetings, the planner will have all the information and will be able to present options. A good planner will be able to introduce ideas without indicating that they emanated from a private discussion with one of the spouses. Then, the spouses are discussing ideas that seem to come from a neutral party.
5. Consider your values and legacy.
Your estate plan is a reflection of your values and the legacy you want to leave. Often, it has a significant effect on how people remember you. Consider the values that are important to you regarding wealth, expectations for your heirs, obligations to your heirs, wealth management lessons you want to leave, and charity. If you don’t put together an estate plan, the government and courts will decide what is done with your wealth. Your heirs might conclude that you didn’t care enough to have a good plan drafted.
6. Shop for a planner.
Different estate planners have different working styles. Some focus on the financial details and don’t deal much with the human elements. They’ll ask you to complete a form dozens of pages long before the first meeting. Other planners take a more informal and conversational approach. They will complete the form themselves after meeting with you for several hours and reviewing documents such as tax returns and investment accounts. Decide which type of planner would work best for you, or interview those with different styles to get a better idea of how they work. Talk to friends and associates who have estate plans to get ideas for styles and planners.
7. Realize that signing the will won’t trigger anything.
Finalizing an estate plan does not advance the date of one’s demise. Some estate planners like to joke that, like buying insurance, signing the will means you aren’t going to need it any time soon. There are many obstacles people put between them and their estate plans. Don’t let these obstacles deter you from putting together a solid plan. Face the obstacles and ensure the legacy you want.
Get help
If you would like to learn more about estate planning, pls do contact our estate planning attorneys to assist you.
