Estate Planning Basics

Estate planning can be complex. A good plan should be tailored to your personal goals and wishes. In this section, we’ll highlight some options to consider when planning your estate. However, please understand these options are not exhaustive, nor are they personalized to your situation. Our firm can consult with you on estate planning and other important financial planning subjects such as insurance, banking and taxes. While we are not tax advisors, we can help you navigate tax issues related to investments. We can work closely with your tax professional and wealth management advisor to optimize your estate planning.

Creating Your Plan

If you plan to leave assets to family, friends, or charities after you pass away, here are some questions to get started:

• How much money do you want to pass on?
• Who should inherit your assets?
• How should they inherit them?
• When should that transfer take place?

Specifying what will happen to your estate after you pass away can help give your loved ones peace of mind when they need it most. If you pass away without a will, living trust or other estate-planning document, the court system may be responsible for dividing your estate and deciding who will receive those assets.

Dealing with poorly managed plans can be stressful for families. Though it may take some forethought, you can start as early as you like. There are many ways to implement your estate plan and the best way for you largely depends on your individual situation.

Explore Ways to Implement Your Plan 

Wills

A will is a legal document that allows you to name someone called an executor (Personal Representative) to manage your estate after you pass. Your will can be as broad or detailed as you like, and you may be able to name specific inheritors of certain assets. These documents can be helpful for those with relatively straightforward estate plans, and they may be good starting points for others.

If you only have a will, your estate may still have to go through probate. 

Probate is a court-supervised process that oversees the transfer of assets when you die and protects the rights of your creditors and beneficiaries.Some people may plan for their estate to go through probate as it provides a standardized process and court supervision.

Living Trusts

Trusts can be expensive and complex, but at their most basic, they are legally binding, written agreements designating someone (maybe even yourself) to be responsible for managing your financial assets and establishing beneficiaries of trust assets.

Even if you have will, a trust can be beneficial as it can help avoid the potentially expensive probate process. A living trust can act as a will substitute, although you may still need a “pour over” will (a document used to transfer assets into the trust upon your death).

To pass assets to you heirs via a living trust, you first transfer assets into a trust for your own benefit during your lifetime. You can select the trustees (individuals given power to act on property in the trust) and, if the trust is revocable, you can retain the right to revoke the trust and alter trustees as you See fit. Living trust assets aren’t normally exposed to public record, which can make it more difficult for anyone to challenge the handling of your estate.

A living trust can also be valuable as a vehicle for managing you financial assets if you become

unable to manage them yourself. As with other aspects of estate planning, it’s best to begin while you’re still healthy. You can choose a representative (spouse, family member or attorney)

To take over as trustee if you are unable to manage your financial affairs. The new trustee can then manage assets for your benefit.

Investment Accounts With Beneficiary Options

Some investment account types, like individual retirement accounts (IRAs), transfer on death (TOD) accounts or certain types of trusts, allow you to name beneficiaries. In these instances. you can often set up both primary and contingent beneficiaries. Primary beneficiaries are first in line to receive specified portions of an account’s assets. Your contingent beneficiaries may receive portions of the account if any of your primary beneficiaries are unable to accept (or disclaim) their share. However, beneficiary settings can vary based on the financial institution and account type, so it may be best to confirm details with an estate-planning professional.

If you have a partner or someone close to you, you may choose to invest to consider are joint tenants with rights of survivorship (JTWROS) and tenants in common (TIC) accounts. However, the features of these accounts differ regarding the death of an account holder, and it’s important to understand the nuances. When an account holder of a JTWROS passes away, the surviving account holder takes full ownership of the assets in the account. In a TIC account, both you and the other account holder have a set percentage of ownership (decided by you) in the account. When one of you passes, the surviving account holder will retain only his or her share of the account, and the deceased’s share of the account will pass to beneficiaries as outlined in the account or estate plan.

These account options are just a few potential options for your estate plan. If your current accounts do not have a readily available beneficiary option or if you have complex plans, you may benefit from creating a will or living trust.