Estate planning is something everyone needs to think about sooner or later, as it is the only way to ensure that your end-of-life wishes are followed. It’s a complicated and highly personalized process, as everyone has their own objectives when crafting their plan. Yet while most people have their own unique goals they’re looking to fulfill, there are some objectives that are common across most estate plans. Knowing these objectives help both the couple and their estate planner determine what might be the best way to structure their estate plan.
The following are 10 of the most common estate planning objectives, all of which should be on your mind when working on your own estate plan.
Provide For Your Loved Ones
Obviously, the most important objective to any estate planning should be to ensure that your loved ones are provided for if you become incapacitated or pass away. While there are many other objectives to worry about, they are all subservient to this main goal. There are many means by which to accomplish this, from choosing who receives your various assets to selecting a guardian for your minor children or pets. When you complete an estate plan, the first question you need to answer is “Have I taken care of all my loved ones?”
We spend a lot of time managing our finances and various assets, so one of the key benefits of estate planning is the knowledge that we can develop systems that can continue to manage our assets when we are no longer able to do so. An effective estate plan ensures that we retain control over our assets for as long as possible, preserving their value in the process. Then when the time is right, they can be handed down to spouses, descendants, and other beneficiaries.
When developing an estate plan, you generally want to ensure that as many of your assets as possible are going to your loved ones and other beneficiaries. As such, a common estate planning goal is to minimize how much of your assets are going towards taxes. At the very least, you should have your estate planner look at estate and income taxes, both at a state and federal level.
Keeping Costs Low
Along with reducing taxes, you should find other ways to keep your estate plan as simple and cheap as possible. Granted, any good estate plan will require a financial investment, but that doesn’t mean you can’t be cost-effective at the same time. That said, remember that your estate plan is a lifelong proposal, so the option that’s least expensive in terms of immediate expenses might not be the best way to go when you consider the long-term cost.
Ensure Your Assets Go To the Right People
Besides making sure that as many of your assets are going to your loved ones as possible, you should also specify who specifically gets which assets. In estate planning, ambiguity is the last thing you want to see, as it creates a degree of doubt in the minds of lawyers and judges about your wishes. If you don’t specifically state who gets your assets or how they should be divided up, someone else will make that decision for you, whether it’s one that you would have been happy with or not.
Guaranteeing Your Children’s Protection
Sometimes an estate plan will have to touch upon the needs of younger children, which comes with its own requirements. If you plan on leaving assets to any minor children in your life, you must name fiduciaries to handle the process, as children generally cannot accept any real estate or financial assets until they turn 18. Additionally, if you are a single parent, you must name someone to serve as your child’s guardian in the event of your death.
Creating a Succession Plan
This is a more specialized goal, but one that’s very important for any business owner, especially if you’re running a family business. You should always have a plan in place for who takes over your business when you’re gone, otherwise, you potentially put the entire business in jeopardy. Even if it seems obvious who is next in line, you should leave no ambiguity on the matter, as it only leaves room for potential conflict.
This isn’t typically a major consideration for estate planning, but many couples prefer estate plans that maintain their privacy when given the choice. This is a good idea, as there has been a growing number of cases where elderly individuals were targeted for fraud, putting their finances at risk. By following certain estate plan practices, one can avoid being targeted by such schemes.
Most estate planning documents are dedicated to what happens after you have passed, but there are also several elements to consider in the event of incapacity. This not only includes establishing durable financial powers of attorney and advance medical directives but also includes other estate planning documents, including insurance planning and business succession planning. This way you can be sure that all of your assets are being tended to, regardless of whether you are able to make a recovery.
Ensure Your Wishes Are Being Followed
Next to the certainty that your loved ones are taken care of, the best thing about creating an estate plan is that feeling of relief knowing that your best wishes will be followed. One of the main reasons that people dislike dealing with estate planning is that death is scary, and the uncertainty surrounding what will happen when we’re gone can be overwhelming. But by keeping these estate planning goals in mind and working closely with estate agents, you can rest easy that even when you’re gone, your wishes for your family’s future will be carried out.
If you have questions about your unique situation or are ready to talk to someone to start making your plan, schedule a free appointment!