The estate planning process, as we see it, is a system of 9 steps.
Why a system?
A system is a repeatable set of steps that maximizes the benefits of the results. Systems are built and monitored to minimize errors and maximize benefits.
The 9 Step Estate Planning Process
Step 1 – Take Action
It is better to get started than to let this sit as something to get done later. You can make changes and fine tune the plan later.
Commit to creating your estate plan just as soon as possible or your family will pay the high price financially and emotionally. If you don’t act, State law will decide who makes decisions if you can’t make them yourself. State law will decide who gets your estate, how much, when, and how.
Step 2 – Decide Goals
The second step of the estate planning process is to decide you your goals.
Different people have different estate planning goals. Some want to leave as much as possible to their children. It is up to you to decide what your goals are. You may have multiple goals and that is fine.
Step 3 – Pick Who Make Decisions
If, when, something happens and you can’t make your own decisions, you need to have people you know and trust to step in and make your decisions.
If you don’t, then your family or friends must go to court and see the Judge. The Judge will decide, not you, who will make your decisions and how much power they get.
Step 4 – Take Inventory
The fourth step of the estate planning process is to take an inventory.
This doesn’t have to be a complete, detailed inventory, but you need to know what you have and what you owe.
At a minimum, you should write down what you have where. Someday, somebody will be glad that they don’t have to call every bank in the area to find your accounts.
Step 5 – Decide Who Gets What
Decide who gets what, when, how, and how much.
Step 6 of the Estate Planning Process – Decide How You Want to Avoid Probate
This is the step where you probably want to enlist the aid of an attorney with estate planning experience.
A plan to avoid probate ranges from simple to complex, depending on your circumstances.
The plan that works for many people is a beneficiary plan. This plan uses mechanisms that transfer your property and money immediately without probate, skipping the courts, creditors, and Medicaid. It puts a special deed in place on your house that not only moves it to the new owners but keeps it out of the hands of Medicaid if you ever need Medicaid.
Step 7 – Get the Documents Done
With the decisions made, it is time to go to a professional, knowledgeable, and responsive attorney to have the legal documents created. An experienced attorney will know exactly what questions to ask to make sure that you get the best plan possible for you and your family. You’ll get a plan that captures your wishes, protects you, takes care of your family, and minimizes or eliminates Judges and Court.
Step 8 of the Estate Planning Process – Fund the Plan
Step 8 of the estate planning process is to fund your plan.
No matter what type of plan you have, you’ll need to go to the bank, financial advisor, DMV, retirement advisor, and a few other places to setup the beneficiaries on your accounts or retitle the accounts like you want. This plan depends on having beneficiaries created and properly maintained.
Step 9 – Ongoing Maintenance
Your plan isn’t even complete. Things happen that will require changes to the plan.
A few of these events are:
- Birth or adoption of children
- Death of a spouse, children, or somebody on your powers of attorney
- Adding people to the plan or changing percentages
- You get married or divorced