There are many important variables to consider as you develop your estate plan. Ultimately, it is your estate plan (or lack thereof) which will dictate what ultimately happens to your assets (both physical and financial), either at your death or in the event of your mental or physical incapacity.
With this in mind, I have put together this list of 6 tips to help you develop a comprehensive and effective estate plan, which can protect you, your family and your business should anything happen to you.
1. Plan for Every Possible Scenario
Many people mistakenly think of estate planning only in terms of death. However, a proper estate plan covers much more. What happens if you are injured or have an illness that leaves you physically or mentally incapacitated and unable to live your life as you do now? Is your medical care covered, along with the financial needs of your family? What if you someday suffer from a mental disability, such as dementia or Alzheimer’s, and are unable to make important financial or medical decisions for yourself? These, among others, are circumstances that you should consider and plan for in estate plan, so that they can be best addressed, if something should happen.
2. Hope for the Best, Plan for the Worst
As is frequently said, the only two sure things in life are death and taxes. Candidly, they are inevitable, for everyone. Other circumstances, however, are not so certain. Hopefully, you and your family will never have to face a serious mental or physical ailment. Still, it is wise to hope for the best but to plan for the worst. This is what effective estate planning is all about. And though it is sobering to think about these issues, it is necessary if you want best to protect yourself and your loved ones.
3. Review Your Estate Plan Annually
It is critical to review your estate plan on an annual basis. Over time, our lives will change in many different ways, year after year. Births, marriages, divorces, changed health, disabilities, death, changed employment, changed business opportunities, and a myriad of other changes happen. Is your life the same as 10 years ago? Do you have the same family members? Do you have the same job? Do you own the same property? Does your property have the same value? And it is critical to recognize that as your life changes, so should your life (and after life) plan. It is vital to keep your estate plan updated in light of life’s changes, to accomplish its purpose. Developing it is not a one-time event.
4. Focus on What Matters
I frequently review what I call an “upside down” estate plan, that is, one primarily focused upon saving taxes and expanding wealth while generally ignoring the client’s own personal goals and concerns (and their family’s unique needs and overall well-being). Your estate plan should first focus on your specific needs. Plan so that you can affectively achieve your goals and objectives in life, while protecting what you have built for your loved ones, to provide for them for when you are no longer here.
5. Follow My Three-Part Approach
I follow a simple, yet effective, three-step strategy for my clients’ estate planning: First, develop your plan with counseling-oriented planning partners. Second, commit yourself and your family to a formal continuing maintenance and education program. Third, secure appropriate assistance for you and your family, to transfer your wisdom along with the rest of your wealth.
6. Hire an Estate Planning Attorney
A key component of tip #5 above is hiring a qualified professional. There are many professionals who can help you with a financial plan, or an overall life plan. But, only an attorney should assist you in the design and refinement of your estate plan. You will want to work with someone who understands estate planning, trusts, taxes and the many other issues surrounding the transfer and management of your estate.
If you are looking to create a more effective estate plan or update your current estate plan, I am here to help. Contact me today to schedule an introductory estate planning consultation.
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