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The Easy Way To Get Started On Your Estate Plan

The Easy Way To Get Started On Your Estate Plan

March 28, 2017

Estate planning is one of those tasks that most of us put off for the future, either because we don’t want to think about our mortality, believe it’s too costly, or because it doesn’t seem necessary. In fact, only 51% of Americans have done any estate planning (1), which means half the population is taking a huge risk when it comes to caring for their families and assets.

Regardless of how much or how little you have to your name, if you don’t create a plan, you are leaving your loved ones with legal headaches. Without medical directives, families are left to guess how to handle end of life care. Without a will, determining how to divide the assets is often left to impersonal judges. Unnecessary probate and taxes diminish the funds left behind.

While it may seem daunting, the process of thinking through end-of-life plans does not need to be complicated or stressful, and the ensuing benefits are invaluable.

Let me share with you six important steps that you can start putting in place today.

Step 1: Rely on Experts

Planning an estate involves many intricate details, such as medical directives, power of attorney documents, and determining how and to best leave your legacy. We live in a time of endless to-do lists and minimal spare time, so the thought of taking on a project of this scale often seems overwhelming.

But don’t let that prevent you from getting your affairs in order. Take the first step of scheduling a meeting with an expert. While it is possible to create wills online nowadays, there are often complex nuances to estate laws, and regulations differ from state to state. An estate lawyer can help you sort through some of the different options to help you create the best plan for you and your loved ones.  

The other experts you should consider are your advisor and your loved ones. Your financial advisor is heavily involved in your financial life and can work with you to make a plan for your assets. Your loved ones know you best and will be able to give you valuable insight when making your decisions, so invite your spouse, your adult children, or other trusted friends to weigh in on these matters.

Step 2: Appoint Trustworthy People

The next decision you will need to make is choosing who you’d like to take care of things in the event of your death. Some people opt to have one person take on this responsibility, while others appoint different people to carry out various tasks. Some states have stipulations on who can serve in these roles, but often they are family members. (2) The primary responsibilities are:

  • Executor: This is the person who is legally responsible for carrying out your will. They will ensure that your assets are distributed to your heirs and that your valuable items are given to the people you intended.
  • Primary Agent: A durable power of attorney is a document that gives someone the legal ability to take care of your financial affairs if you are unable to do so. This person, called the primary agent, should be someone who is financially savvy and organized. They will handle any bills or income received and will follow your instructions laid out in the Durable Power of Attorney.
  • Health Care Proxy: Similar to a primary agent’s job to make financial decisions on your behalf, a healthcare proxy is someone you appoint to make medical decisions for you if you are unable to do so. These wishes can be laid out ahead of time in a document called a medical power of attorney.

Start a conversation with the people you trust most to handle your affairs and let them know that you are including them in these official documents.

Step 3: Create a Will

Once you have the people in place, you are ready to make some decisions about what to do with your assets. A will is a legal document that spells out your wishes for how you’d like your assets to be distributed in the event of your death and includes the name of your executor. There are several important components that your will contains:

  • Distribution of Assets: For most people, this is an easy decision of who you’d like to inherit what you leave behind. Determine what assets to include in your will, from various bank accounts to items of value. In your will, you can specify who gets what and what amount or percentage.
  • Distribution of Property: You can also leave property to specific people. This includes tangible property, such as real estate, heirlooms, or even vehicles. You may also leave intangible assets, like bonds, copyrights, or royalties to people in your will.
  • Guardianship for Children: For those with young children, this is a crucial part of a will. In the event of your death, you can state who will become their legal guardian. If you are leaving property to your children, you may also indicate who will manage the property until they come of age.

While a will is one of the most important documents in your estate plan, there are some items that it doesn’t cover. For example, jointly-owned property can not be given away in a will. Also, the courts will defer to other legal documents like retirement plans or insurance policies if there is a different beneficiary listed.  

Step 4: Consider Trust Funds

Depending on what you want to accomplish with your assets and the specific needs of your situation, you may want to look into setting up a trust fund for your heirs. Contrary to popular belief, these are not just for the very wealthy. Trusts can be a wise way to ensure that the legacy you’re leaving behind is protected. There are also significant tax benefits in choosing trust funds, as money in trusts bypass probate.

You may consider setting up a Living Trust, also known as a revocable trust. In the event of your death, the trust ends and is distributed to designated beneficiaries, similar to that of a will, except that the process is quicker and the assets are not taxed. If you’d like to contribute some of your assets to a cause that is close to your heart, you may consider a Charitable Remainder Unitrust (CRUT). This not only aids a charity but also give you immediate tax breaks. (3)

Talk with an estate lawyer to help you determine which option is best for your situation.

Step 5: Think Through Medical Directives

This may seem like a morbid topic to dwell on, but making decisions about how you’d like to handle difficult medical situations is an important part of an estate plan. It empowers you to have a voice, even if you become incapacitated.

Depending on where you live, there may be a couple of different documents that lay out your wishes, including a health care related power of attorney document, a living will, and medical instructions. This plan would also list your healthcare proxy or agent who can make medical decisions on your behalf.

Step 6: Organize Your Documents (And Keep Them Updated)

Once you have gone through the steps of making decisions about your estate and creating the necessary legal documents, you need a way to keep these documents safe and accessible when they’re needed.

I always recommend keeping these documents in one secure location, such as a fireproof safe, along with electronic backups. Let a few trusted people know where these documents are stored and how to access them if the time comes. A little organization now can help save time and stress for your heirs and executor down the road.

The other thing to keep in mind is that these documents will probably need to be updated periodically. Outdated wills or other documents are sometimes disregarded or disputed. Any major life event, such as a marriage, birth, or death in the family, is a time to think about updating your estate plan paperwork. If you change any of the beneficiaries in one place, such as a life insurance policy, make sure that they are consistent with the other documents so that there is no confusion.

Get Started Now

It is never too early to start putting a plan in place for your estate. Many families feel more confidence and peace of mind when they made the decisions necessary to get a plan in place. Whether you are starting from square one, or you think it's time to update your will, I'd love to help you with your estate planning. Contact me today at (949) 631-3840 or

About Jim Peters

Jim Peters is an independent financial advisor and the founder of Grace Wealth Management Group, Inc., a full-service financial firm committed to helping people pursue their financial goals. With more than 24 years of experience in the industry, Jim combines his extensive knowledge with his genuine interest in helping people pursue financial independence. Beyond his experience, he is certified as both a Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®), meaning he has advanced training and knowledge in financial planning and insurance. Based in Irvine, California, Jim specializes in working with individuals, families, and businesses throughout Orange County. To learn more, connect with Jim onLinkedIn or