The Steps for Successful Estate Planning


Planning Now for Later

Ancient Wisdom says, “… A good man leaveth an inheritance to his children’s children” (Prov. 13:22 KJV).

It isn’t the most pleasant thought, but it is important to devise an estate plan during life to make sure your affairs are in order after you pass away. Estate planning is the process for the distribution and conservation of one’s wealth through prior tax planning (in the forms of real estate, retirement, savings and valuables) and with the caveat that the laws have yet to cover digital purchase. According to Andrew Chow, Esq. you may even be able to pass on your iTunes, eBooks, and movie accounts to your loved ones by leaving the passwords for the devices and accounts using DapTrust software to create a legal trust for your online accounts.

Estate planning helps to eliminate uncertainties regarding the probate process after death and minimize taxes and other expenses and it is not just for the wealthy. Anyone who has something of value has the need for an estate plan. In America, due to the new financial healthcare costs incurred to each of us with the implementation of the Affordable Health Care Act, changes in Medicare, and Medicaid rules affecting how much you now must pay out of your pocket, changing IRS tax rules and non-taxed death inheritance transfer rules, preservation through estate planning has become important for those who wish to look out for their family and children by leaving some kind of inheritance to their loved ones.

Ask yourself these questions: Who will my assets be transferred to? Do my loved ones have access to the necessary paperwork? What am I leaving them that are valuable?

A thorough estate plan might include the following documents:

  • Will
  • Designation of Beneficiary Forms
  • Financial Power of Attorney
  • Health Power of Attorney
  • Living Trust
  • List of Contacts/Important Information

Some of these documents may not apply to you, and that’s okay. For example, you may choose to create a living trust instead of a will. End-of-life planning will differ from person to person.


A will outlines your final wishes for your family after your death. Upon your demise the two year probate process will begin with the hiring of an attorney, their fee is set by state law, next the county court where you live will read the will, appoint an official personal representative or executor who is able to charge your estate for their services and expenses, and finally, see that your wishes are carried out.

Wills commonly:

  • Appoint guardians for children under the age of 18
  • Appoint guardians for pets
  • Appoint an executor – someone who is responsible for executing/overseeing the demands in the will and can charge for expenses incurred in carrying out your directives
  • Explain how debts and taxes will be paid

Learn more about the legal requirements of a will and how to create one.

Designation of Beneficiary Forms

Appointing beneficiaries for your retirement and investment accounts is a good way to avoid the probate process. When you die your named beneficiary/beneficiaries automatically become the owners of the account.

You should review these forms every few years for accuracy, and make sure they are in keeping with any major changes in the tax codes or that could materially affect your estate. You should also review them after major life events: the birth of children or grandchildren, the death of a spouse or parent, marriage and divorce.

Failure to update the information could lead to your estate going to the wrong recipient such as an ex-husband or deceased mother receiving the rights to the account, creating a headache for all involved in the process. Not to mention, it could leave those you want to inherit your estate out in the cold.

Power of Attorney

A medical or financial power of attorney designates a person, commonly referred to as an “agent,” to make decisions on behalf of an incapacitated person.

The agent typically has the power to:

  • Make decisions regarding childcare and guardianship
  • Make important health care decisions (like when to stop medical treatment should you have a DNR “Do Not Resuscitate ” or a choice of life by a LGC “Life Guardian Card” to continue Life support or an organ donor card)
  • Maintain a safety deposit box
  • Manage finances

Learn more about the types of powers of attorneys to determine which one is best for your estate planning needs.

Living Trust

A living trust, also called a revocable trust, outlines all of your assets and designates them immediately, without waiting to appoint beneficiaries upon your death. Probate on the other hand, can tie up your estate for up to two years, which limits your loved ones access to your estate for that time, leaving it in the hands of the personal representative or executor, and requires by law the mandated help, of an attorney, and your estate incurring additional legal and other costs.

Avoiding probate is the main difference between a living trust and a will, and the main reason many choose a living trust instead of a will to include in their end-of-life paperwork.

Proper estate planning requires specialized tax knowledge and is a specialty within the legal profession. In general, a living trust can be revocable (changeable) or non-revocable (unchangeable). Both require tax attorneys who specialize in estate planning, as well as appraisals of your assets approved by the Internal Revenue Service (IRS) rules. Certified real estate and other appraisers and certified public accountants (CPA’s) must be used and qualified.

Trust documentation needs to be written, naming your successor trusties and can include any end-of-life directives. Your assets must be placed within a Limited Partnership (a business partnership) that names the general and limited partners within the trust while you are alive. In a revocable trust you are still able to control all of the assets placed within the partnership trust while you are living as a general partner. Limited partners are just that. They are limited and have no control over any of the assets in the partnership. In a non-revocable trust, once complete there are no changes made.

Many times a purchase of a second-to-die insurance policy is made to help pay for any inheritance death taxes that maybe due. This type of policy has an acting trusty who insures premium payment is made. Upon death, this insurance policy is paid, and the proceeds of the second-to-die insurance policy, in order to avoid taxation as income, needs to be paid in direct succession to the IRS. Unlike a will, a living trust does not die with you.

Learn more about the benefits of a living trust.

List of Contacts

One of the most overlooked documents in an estate plan is a list of helpful information, including:

  • Contact information for various vendors, like your attorney, bank and funeral director
  • A list of passwords and usernames for online accounts, bank accounts (including account numbers) and insurance policies with policy numbers.
  • List of all family members (to determine line of inheritance)
  • Information about where important documents are stored, or can be accessed
  • The password for the household safe

Having this information handy can save your loved ones the trouble of guessing and searching after your death. Learn more about how to share important information in your estate planning documents.

Finding Help

End of life planning is not an exciting or fun activity, but it is a necessary evil. To lessen the burden on your loved ones, an estate plan is essential. With the help of local attorneys and online resources who specialize in estate planning you can begin developing a plan that will ensure security for your loved ones, and exercise the power of control that your wishes are carried out the way you intended from beyond the grave.

Note: This is a general discussion regarding estate planning. One should check with their attorney for individual legal advice as everyone’s circumstances differ. The information in this article is not intended to be legal advice.

Additional Resources





Print Friendly, PDF & Email