Estate planning,

by the numbers.

Everything you need to know about estate planning... in plain English.

Planning for the future is one of the most proactive, wisest decisions that you can make – not only for yourself, but for your loved ones. Estate planning is for everyone at all ages and levels of wealth. It is a crucial process that

• Ensures assets are distributed according to your wishes
• Minimizes legal delays and costs
• Protects your loved ones from unnecessary stress and wealth loss

Understand these five key steps to help you make informed decisions and avoid estate planning mistakes.

Take Inventory of Your Assets

Before you do anything else, list everything you own and owe. Your "estate" simply refers to all of the assets you have accumulated over your lifetime. Knowing their value helps determine how they should be managed and distributed.

A comprehensive inventory helps your planner efficiently settle your affairs when the time comes.

What counts as an asset?

• Real estate: Primary residence, vacation homes, rental properties
• Financial accounts: Checking, savings, investment, and retirement accounts
• Personal property: Vehicles, jewelry, artwork, collectibles
• Business interests: Sole proprietorships, partnerships, or corporate shares
• Insurance policies: Life insurance and annuities
• Digital assets: Cryptocurrencies, domain names, social media accounts

Make a list of these items, along with their estimated value, to make the estate planning process smooth and easy.

Tracking Debt and Liabilities

Just as important as listing assets is documenting liabilities. Common liabilities, or debt, include:

• Mortgages
• Car loans
• Credit card balances
• Personal or business loans
• Medical bills

Understand your outstanding obligations ensures that your estate is settled properly and prevents heirs from facing unexpected financial burdens.

Create an Asset Inventory Document

Once you've listed your assets and debts, organize this information in a document that your executor can easily access. This should include account numbers, locations of documents, and contact information for financial institutions. Regularly updating this document ensures that it remains accurate.

02

Choose Key Decision-Makers

The Role of Decision-Maker in Your Estate Plan

Estate planning involves selecting individuals who will manage your affairs in case of incapacity or death. These roles are crucial in ensuring that your wishes are carried out efficiently and legally.

Executor of the Estate

The executor is responsible for managing your estate after your passing. Their duties include:

• Filing necessary paperwork with the court
• Paying outstanding debts and taxes
• Distributing assets according to your will

While you may appoint a trustworthy, organized, and willing family member, most people hire estate planner to be their executor. Note that the executor is not the benefactor. Control the estate is dictated by various legal structures discussed later.

Power of Attorney

A power of attorney (POA) allows someone to handle financial matters on your behalf if you become incapacitated. There are two main types:

• General POA: Grants broad authority over finances
• Limited POA: Grants specific powers for a defined period or transaction

Choosing a financially savvy and responsible person for this role can prevent financial mismanagement.

Healthcare Proxy

A healthcare proxy (or medical power of attorney) designates someone to make medical decisions if you are unable to do so. This person should understand your healthcare preferences and be willing to advocate for them.

Guardianship for Minor Children

If you have minor children, naming a guardian ensures they are cared for by someone you trust. Consider the potential guardian’s financial stability, values, and ability to provide a stable home environment.

03

Create the Core Estate Planning Documents

Why These Documents Matter

An estate plan isn't complete without the proper legal documents. These formalize your wishes and prevent disputes among heirs.

Last Will and Testament

A will outlines how your assets should be distributed and who should manage your estate. If you pass away without one (intestate), state laws will determine the distribution, which may not align with your intentions.

Trusts

A trust can help manage assets, reduce estate taxes, and avoid probate. Common types include:

• Revocable trusts: Can be changed during your lifetime
• Irrevocable trusts: Cannot be altered after creation
• Special needs trusts: Provide for disabled beneficiaries without affecting government benefits

Advance Healthcare Directives

An advance directive specifies your medical preferences in case of incapacitation. This includes:

• Living will: Instructions for life-prolonging treatments
• Do Not Resuscitate (DNR) orders: Directives for emergency medical care

04

Review Beneficiary Designations & Tax Strategies

The Importance of Beneficiary Designations

Certain assets bypass probate and go directly to named beneficiaries. These include:

• Life insurance policies
• Retirement accounts (401(k), IRA)
• Payable-on-death (POD) bank accounts

Regularly updating these designations prevents unintended inheritances.

Minimizing Estate Taxes

Strategies to reduce estate taxes include:

• Gifting assets during your lifetime
• Setting up trusts
• Taking advantage of federal estate tax exemptions

Consulting with an estate planner or tax professional ensures you utilize the best tax-saving strategies.

05

Keep Your Estate Plan Updated

Why Updates Are Necessary

An outdated estate plan can lead to unintended consequences. Major life changes warrant a review, including:

• Marriage or divorce
• Birth or adoption of a child
• Death of a beneficiary or executor
• Changes in tax laws

How Often Should You Review Your Plan?

Experts recommend reviewing your estate plan every three to five years or after significant life events. Keeping it up to date ensures that it reflects your current wishes and financial situation.

Making Changes to Your Estate Plan

Simple updates, like changing beneficiaries, can be done with a form. More complex changes may require drafting a codicil (amendment to a will) or restating a trust.