Estate Planning 101

An estate plan is one of those things that we all know we should have, but few of us actually ever get to. Like backing up our computers, we figure we’ll do it some day. But, because we procrastinate, we inevitably find ourselves in a situation where our hard drive is fried or a virus has wiped out all of our data. So too, is the situation with estate planning – sometimes we wait until it’s too late and our relatives or the courts decide how our belongings will be distributed.

So, what is an estate plan? Very simply, an estate plan is a compilation of the critical data necessary to ensure that your wishes are carried out after you pass. Wills and trusts are typical devices used in estate planning. Depending on the complexity of one’s estate and the magnitude of one’s belongings, the results of the estate planning process can range from a simple will to a complicated series of trusts and other tax-advantaged maneuvers to convey an interest in property upon one’s passing. While there are several books and software programs available out there to facilitate the data gathering required for estate planning, the following is a list of the kinds of information that will be required. Even if you choose to engage the services of your lawyer or financial planner to assist with your estate plan, (which you will definitely want to do!), gathering this data ahead of time will enable you to get through the process more quickly and will save you money.

Typical Data Used in an Estate Plan:

Detailed demographic information on all of your children and other beneficiaries including name, sex, social security number and birthday; don’t forget to include any charities that you wish to designate as beneficiaries
A listing of the person or persons that you desire to name as guardian for your children; the person or persons you wish to assume responsibility for your pets
A list of individuals specifically and intentionally excluded as beneficiaries
A detailed breakdown of your assets including;
Bank accounts, mortgages, notes, real estate (including your residence), stocks, stock options, business interests, bonds, mutual funds, life insurance policies, 401(k), IRA and other pension accounts
An inventory of all of your personal property; if you have completed a home inventory that includes photos, make/model/serial number, etc., of all of your possessions, it can also be used for this purpose. If you do not have a home inventory, now is a good time to complete one.

A listing of your liabilities including:
Any mortgages, credit cards, loans, etc.
A directory of all of your advisors including:
Accountant
Financial planner
Lawyer
Banking Relationship Manager
Executor
Trustees
A listing of the location of critical documents such as:
Deeds, auto titles, stock certificates, bonds, bank account registers, life insurance policies, will, home inventory, etc.
While the estate planning process can be detailed and cumbersome, you’ll sleep easier once it’s completed knowing that you’ve documented the information that will be required to ensure your last wishes are carried out after your passing.


By Derek Lee