My Services: Estate Planning

Ten Steps to Sound Planning.

Are you geared up to start the estate planning process but not sure where to begin? Here is a ten-step plan to get you started:

Step 1: Choose a qualified professional to work with.

Select a qualified attorney or financial advisor to work with and set up a meeting. The person should be experienced in his or her field and knowledgeable about public benefits and disabilities.

Step 2: Inventory your assets, paying special attention to how they are titled, including beneficiaries.

Taking stock of what you own is important because it lets you know how much property you have to pass on. Complete the net worth or financial statement that your adviser sends you. Your adviser will need to know how much you are worth as well as how you own your assets (individually in your own name, jointly with owners, etc.). Naming the correct beneficiaries is important too. (See Step 8.).

Step 3:  Establish your goals.

There is no one-size-fits-all in estate planning. Your goals will be as unique as your family. Some typical goals of a family that includes a child with a disability might be to:

  • Protect the financial future of your special needs child
  • Assure that your children with disabilities can afford higher education if you are not here to assist them
  • Choose an appropriate age for your children without disabilities to receive their inheritance
  • Leave enough money for your spouse to live comfortably
  • Protect your assets from creditors
  • Reduce or eliminate excessive probate costs
  • Reduce or eliminate any potential estate taxes

Step 4: Prioritize your goals.

Since you probably don’t have unlimited funds to spend on estate planning services, you may need to scale back or prioritize your goals. Most people's choices are influenced by factors like  their age, earnings, asset level, and health. A healthy young couple would probably emphasize saving for college over reducing estate taxes, while an older couple with adult children might focus on eliminating estate taxes and probate costs. Your attorney or financial advisor can help you prioritize your goals.

Step 5: Identify the people who will carry out your wishes.

A difficult but important task is to identify the people who will raise your minor children and make important decisions for them if you are not here (the guardian). You must also select trustees to manage your child’s special needs trust and your non-disabled children’s inheritances until they can be distributed at the age you specify. Last, you must select an executor and an alternate executor to settle your estate.

Step 6: Purchase any necessary insurance.

Purchase any necessary life, disability, or long-term care insurance through your financial planner or insurance agent. Take special care to name the correct beneficiaries for life insurance policies and retirement accounts (see item #8).

Step 7: Complete the estate planning documents.

Have your attorney draft the necessary estate planning documents, which will most likely include a will, special needs trust, durable power of attorney, health care proxy, living will, and perhaps one or more additional trusts. When the documents are in final form, meet with your attorney to have them properly signed, witnessed, and notarized. Prepare a Letter of Instructions (also called a Letter of Intent) that gives instructions for your disabled child's future care, and send it to the people who will be caring for your child when you are no longer able to do so.

Step 8: Coordinate the beneficiary designations with your overall estate plan.

Have your attorney prepare the correct language for all assets that have beneficiaries, such as life insurance policies, retirement accounts, and annuities. Then contact each insurance company or retirement plan administrator to update the beneficiary forms. Follow up to make sure that the company has implemented your instructions. Often this can be done online.

Step 9: Communicate your wishes.

Give signed copies of your legal documents to your executor and trustee. Tell them where to find the original documents as well as other important papers such as bank account statements and life insurance policies.

Step 10: Monitor your estate plan.

Plan to periodically review your estate plan to assure that it still meets your needs. Perhaps the people you have named are no longer appropriate for the roles you have selected—a parent might develop health problems or a sibling could move far away. Other triggering events can be  the birth of a child, a child moving out of the home, or your or your spouse’s retirement. Your estate plan might also need a second look if there have been any significant changes in the laws that relate to your situation, such as Medicaid, income tax, or estate tax laws.

 

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