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Six Steps to Getting Your Estate Plan in Order in the New Year

Posted February 2018

Sometimes things you don't address today can come back to haunt you tomorrow. Delaying that doctor's appointment or putting off a visit to the mechanic about that intermittent knock in your car's engine may seem to make sense given your busy schedule—but those decisions may prove more costly in the long run. Estate planning is often the same way.

You may have been putting estate planning off because it seems time-consuming and addresses issues you'd really rather not think about. Yet ultimately not having an estate plan is like leading your loved ones on a hike through a strange wilderness without a map: You're at the mercy of whatever comes your way, and you're not planning ahead for your loved ones.

Through the years many individuals have found charitable estate gifts to be an excellent method of reducing taxes for their loved ones and benefiting us as one of their favorite organizations. Such gifts offer a major planning opportunity to minimize federal and state estate taxes and to reduce the need for liquidity.

With a new year upon us, make a resolution to get your estate plan in order. Here are six basic steps:

  1. Inventory your assets. What types of property—real estate, cars, and other assets—do you own? How much are they worth? You will ultimately simplify your executor's job if you leave sufficiently detailed instructions about the location of your assets—bank accounts, stock certificates, safe deposit boxes, insurance policies, and other types of assets—as well as the location of your personal records, tax returns, bank statements, and other documents.

  2. Decide how you wish to distribute your assets. Do you have a child who might need more financial assistance than his or her siblings because of health or economic reasons? Would you like to leave your stamp collection to your dear friend who has always enjoyed it? Would you like to make a gift to us because you believe in our mission and would like to see it continue?

  3. Seek financial and legal counsel to find the planning vehicles that meet your objectives. An accountant and/or an attorney, especially one trained in estate planning, can help guide you through the planning process. For example, most estates suffer from a severe shortage of cash. The need for cash arises in the first stages of the estate-settlement process. Funeral and burial expenses must be paid. Attorneys' and appraisers' fees are incurred, and debts and taxes must be paid. Professionals can give you advice on how to address such issues to your financial advantage.

  4. Once you have defined the most effective plan, you need to have the necessary legal instruments prepared. For example, do you have a valid will? Most people don't. A will allows you to control who gets what. It allows you to make gifts to the people and charitable organizations, such as ours, that you care about. If you don't have a will, you hand the disposition of those assets over to the state—which will distribute them according to inflexible formulas that are probably not to your liking.

  5. Once you have prepared the will, make sure that your executor knows where it is. Generally, the original will should be placed either in an attorney's vault or in a bank's vault if the bank is acting as executor. The will may also be placed in a safe deposit box, though some states restrict the access to such boxes and that could cause delays for your executor.

  6. Review your estate plan periodically. Changing circumstances—the birth of a child or grandchild, the death of a spouse, remarriage, or relocation—will likely require revision of your original plans.

We'd be happy to help you in any way that we can. Please contact us today.

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