What should you determine prior to planning your estate?

What should you determine prior to planning your estate?

On Behalf of | Feb 22, 2022 | Estate Planning |

Planning your estate can help you determine what steps to take to achieve your aspirations for the future. With a carefully coordinated plan in place, you can provide surviving family members with everything they need to successfully and efficiently close your estate when the time comes.

Because estate planning requires ongoing attention and periodic updates, you are never quite finished. However, making some key decisions prior to starting your plan can help you put together a strategy that meets your unique lifestyle needs.

List any dependents

One of the most valuable aspects of any estate plan is the ability to coordinate the care and well-being of any dependents you have responsibility for. Circumstances depending, this may include your children, grandchildren or disabled relatives that you help care for. According to CNBC, you may consider implementing a trust fund where you can exert some control over the distribution and use of assets dedicated to providing for dependents. While not always necessary, trusts are a key part of many estate plans and can generally allow you to avoid the probate process of the courts if properly funded.

When you know who relies on you for financial support, you can more confidently select a strategy that allows you to adequately plan for everyone’s needs. Periodically review and update your plan, especially if dependents reach an age where they no longer rely on you for support. A common form of trusts, revocable trusts, can be occasionally updated, amended, and restated.

Consider your assets

Another consideration to make before you begin planning is the amount of assets you have, as well as the scope and value of each one. Business ownership, real estate, investment portfolios, acquired inheritance funds, bank accounts, and even collectibles can all fall into your asset category.

You may want to have a subtle idea of how you wish to distribute your assets and under what conditions your beneficiaries will have access to their inheritance. You may also consider giving your beneficiaries a brief description of your intentions so everyone has a mutual understanding.

Due to the value that an estate plan can add to your life, it is wise to allocate adequate time and planning resources to create your strategy. At minimum, a will should be considered so your assets do not pass through the “default provisions” of intestacy (laws that distribute your estate when no will or trust exists).