Estate plans can take many forms and aren’t only for the elderly or ultra wealthy. There are a few key factors to keep in mind that can guide your process and support your vision.
Choose an attorney –  Find an estate planning attorney who will help you consider ways to limit the need for probate and possibly lower your tax bill, and who will also guide you through the very personal process of identifying and meeting your goals. Get recommendations from your friends, co-workers and financial advisors. Make sure he or she is open to answering all of your questions in plain English. Empathy is important – after all, your attorney will likely be dealing with your family at a very difficult time.
Start with a will – Every year, a significant number of Americans die without a will. For practical purposes, this means that the state in which they live will dictate what happens to their assets and property. This may be fine for some. However, assets can wind up in the hands of an estranged spouse or relative simply because there wasn’t a will. A will is especially important for every parent, even if you don’t have many assets.
Don’t stop there – A will is a great beginning – but there are a couple of big issues it won’t touch: probate and taxes.
Probate may be required when assets are registered only in the name of the person who has died. So whether it’s your house or your bank account or your car – your property may have to go through this lengthy, costly and public process unless you have made other arrangements.
A common misperception is that if you avoid probate, your estate also avoids taxes. Not so. If taxes are an issue for you, your attorney may recommend a combination of trusts that will help you direct more of your estate to your intended beneficiaries.
Create an advanced health care directive and durable power of attorney – We all should consider an advanced health care directive to let our doctors, family, and friends know our wishes about emergency and end-of-life care. This is a very tough subject, for sure, but it’s a necessary consideration unless you want someone else to decide for you.
Discuss your choices – Once you have created your plan, talk to your family and other beneficiaries about your choices. By doing so, you can protect them from surprises later on – especially important if your decisions differ from what they might expect. And perhaps even more important, it will allow you to share your vision for the legacy you want to leave behind. Make the best decisions for the present, and then plan to revisit your choices every few years.
Kevin Gerard is a Mequon-based independent branch leader with Charles Schwab & Co., Inc.
