It is believed that estate planning and deciding how your valued assets will be handled after you die is only for wealthy people with a large financial “estate.” The reality is that estate planning makes sense all individuals, wealthy and otherwise.

Who is a good candidate for estate planning?

You are, if you:

  • have minor children (and other dependents, such as aging parents who need care) and want final say in who serves as their guardian(s) should you (and/or your spouse) die prematurely or unexpectedly;
  • want to leave a lasting family legacy by passing on assets to your children and other family members when you die;
  • have philanthropic inclinations and want to set aside something for charities and other organizations (such as a church or your college alma mater);
  • want to determine exactly how your assets are handled when you are gone;
  • own a business;
  • want to maximize the amount of your money and assets that transfer to loved ones, charitable organizations and the like after you die, while minimizing the taxes your beneficiaries must pay on those assets.

Why estate planning?

Estate planning gives people the means to spell out in specific, legal language their wishes and intentions and how and who they want to carry them out. When such a plan is absent, the decisions on vital issues like those mentioned above could land in the hands of the probate court and a judge who, chances are, knows a lot less about your intentions than you do.

What goes into an estate plan?

It is a legal document or documents, typically drafted by an attorney, specifying an executor for the estate, guardian(s) for children and other dependents, power of attorney, health care surrogate and living will, along with details on all assets in the estate (life insurance policies, annuities, retirement plans, etc.) and how they are to be distributed at death. Trusts for tax-efficient transfer of wealth to heirs may also play an important role in an estate plan.

When and how to start estate planning?

Now, with the help of capable and trusted advisers. The 10-year anniversary of the Sept. 11 terrorist attacks provided a stark reminder that the life’s unexpected moments can strike anytime, to anyone. An estate plan is designed to cover you and your loved ones, no matter what happens.

To start the process, consult a financial planner with estate planning expertise. Then, once you have an estate plan in place, be sure to revisit it as life circumstances change, and periodically even if your circumstances have not changed, to be sure it is up-to-date. In the end, while you may not be able to dictate your own destiny, you certainly can shape your legacy.


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