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What Are The Primary Goals Of Estate Planning?


Estate Planning means the process of transferring the total assets of an individual among his legal heirs anticipating death or incapacitation. In this way, estate planning arranges to distribute the real and personal assets of an individual among his heirs. Thus, I can say that Estate Planning means making adequate planning in relation to total property i.e. real and personal owned by an individual for distribution through a Trust or Will.

Real property means real estate and personal property means other than real estate such as household items, personal belongings, cars, bank accounts and etc. Most of us don’t give too much importance to estate planning either due to ignorance or think it to be a complicated one. Interestingly, we like to own assets but not planning for it. This is just simply because we are not financially literate enough. Estate planning is as important as owning or accumulating assets.

Generally, we use will or trust as the way of transferring our wealth. Obviously, there are others ways too such as Power of attorney, Gifts, Succession, and Partition.


How to Create an Estate Plan

Yes, there are a lot of steps that go into creating a complete Estate Plan, but we’ve made it as easy as possible for you by listing each out.

  • Gather your assets. Inventory everything you own, from cars to collectibles.
  • Protect your family. Think about if you have adequate life insurance to leave your family in a position where they could maintain the life you currently lead.
  • Determine the plan that’s best for you. Decide what type of Estate Plan you need.
  • Choose who you would like to be guardian of your children/pets/self. If you have children or pets, or if you care for another loved one who cannot care for themselves, you want to choose a guardian. You can also name the person you would want to make medical and/or financial decisions on your behalf should you ever become unable to do so for yourself.
  • Determine and establish the necessary directives. There are several directives you should include in your Estate Plan, including but not limited to:
  • Durable Power of Attorney
  • Medical care directive
  • Limited Power of Attorney – LPOAs are less commonly used (Durable POAs are more frequently the norm), though an LPOA can be appropriate in some instances.
  • Name your Beneficiaries. Some documents and accounts will have Beneficiaries already designated. These could include retirement plans and life insurance policies, to name a few. But there are other assets you should note in your Will or Trust if you’d like to leave them to a specific person. If there is an opportunity, you should name contingent Beneficiaries. Keep in mind that Beneficiary designations will only go into effect after you pass, so if you become incapacitated and unable to make decisions, you need to have prepared for more than simply naming Beneficiaries.
  • Find a trusted partner. Explore your options for creating your Estate Plan. This can be face-to-face with an attorney or you may choose to use another service provider. You have options, but some are going to be much more expensive than others. If you don’t have an overly-complicated estate, working with a partner like Ascent Law Firm could be the perfect solution to starting on the path of Estate Planning.
  • Create your plan. If you’re using an online program to create your Estate Plan, be sure to go through all the steps and finalize everything.
  • Sign and notarize your Estate Plan. Don’t forget to check how many witnesses your state requires.
  • Notify your Executor. It’s a good idea to let the person you chose to be your Executor know of your intentions.
  • Store your Estate Planning documents. Put your Estate Plan in a safe place where your loved ones can easily find it. A fireproof safe is a good idea.
  • Update as needed over time. There isn’t a hard rule about when you should update your Estate Plan, but a good rule of thumb is try to update it whenever you have a major life event (birth of a child, death of someone important to your plan, marriage, divorce, etc.). And if you find you haven’t had any life events in recent years, try to review and update as needed every 3 – 5 years.

Common Estate Planning Mistakes to Avoid

Take caution when developing your Estate Plan. There are many mistakes that could result in delays, inaccuracies or other misunderstandings. Some of the common mistakes people make along the way include:


  • Not having an official plan
  • Not updating a plan over time (at major lifetime events)
  • Not making arrangements for if they become incapacitated (disability or long-term care)
  • Improper ownership of assets (how easy will it be to pass assets on)
  • Not including charitable gifts
  • Not appointing a guardian for children or others who would need their care
  • Underestimating the implication of taxes
  • Not having liquidity of assets
  • Not making gifts during their lifetime to reduce the value of the estate after passing (tax advantages)
  • Putting their child’s name on the deed to property (potentially huge tax implications)


Estate planning goals and objectives that you might consider include:

  • Provide financial security for your family
  • Ensure that your property is preserved and passed on to your beneficiaries
  • Avoid disputes among family members, business owners or with third parties (such as the IRS)
  • Provide for your children’s or grandchildren’s education
  • Provide for your favorite charity
  • Maintain control over or ensure the competent management of your property in case of incapacity
  • Minimize estate taxes and other costs
  • Avoid probate
  • Provide adequate liquidity for the settlement of your estate
  • Transfer ownership of your business to your beneficiaries


What Are Estate Planning Strategies?

An estate planning strategy is any method that facilitates the distribution of your assets and the settlement of your estate according to your wishes. There are different estate planning strategies available to you based on your goals and objectives.

  1. Intestate Succession.

Intestate succession is a strategy by default and is a means of transferring your property to your heirs if you have failed to make other plans such as a will or trust. State law controls how and to whom your property is distributed, who administers your estate and who takes care of your minor children. Without directions, your opinions and feelings are not considered. Indeed, one of your primary goals in planning your estate may be to avoid intestate succession.

  1. Last Will And Testament.

A will is a legal document that lets you state how you want your property distributed after you die, who shall administer your estate and who will care for your minor children. This is probably the most important tool available to you. Anyone with property or minor children should have a will.

  1. Will Substitutes.

A will substitute –  for example, Totten trust and payable on death bank accounts allows you to designate a beneficiary of certain property that will automatically pass to that beneficiary after you die and avoids passing through probate.

  1. Trusts.

A trust is a separate legal entity that holds your assets that are then used for the benefit of one or more people (e.g., you, your spouse, or your children). There are different types of trusts, each serving a different purpose, and include marital trusts and charitable trusts. You will need an attorney to create a trust.

  1. Joint Ownership.

Joint ownership is holding property in concert with one or more persons or entities. There are different types of joint ownership, such as tenancy in common and community property, each with different legal definitions, requirements and consequences.

  1. Life Insurance.

Life insurance is a contract under which proceeds are paid to a designated beneficiary at your death. Life insurance plays a part in most estate plans.

  1. Gifts.

A gift is a transfer of property, not a bona fide sale that you make during your life to family, friends or charity. Making gifts can be personally gratifying as well as an effective estate planning tool.

  1. Tax Exclusions, Deductions and Credits.

There are several important estate planning tools you can use that are offered by the federal government. These include the annual gift tax exclusion, the applicable exclusion amount, the unlimited marital deduction, split gifts, and the charitable deduction.


Contingent Beneficiary

The phrase “contingent beneficiary” can be defined by looking at each word individually. “Contingent” means to be dependent on another person or event. “Beneficiary” is a person who receives assets from a will, life insurance policy, payable-upon-death account, or any other situation that transfers ownership after the death of the estate owner.

A contingent beneficiary will receive the gift from your estate if one or more given conditions are satisfied. For example, your will may say: “my son will receive my 1979 Corvette upon my death if he graduates college.” Here, the gift is the car, but your son will not receive the car if he does not graduate from college. Thus, the vehicle only transfers upon the completion of the stated contingent condition. When deciding how to complete your estate plan, you may want to weigh the pros and cons of putting conditions on the distributions of your assets.


Benefits of a Good Estate Plan

Estate planning helps you avoid many unfortunate situations, and while it can take some time and money upfront, you can avoid many worse problems later on. For example, if you don’t provide a clear estate plan, the state will do what appears best in its judgment, which is unlikely to coincide with what you would choose to do. Don’t leave your estate up to the state.


Minimizes Taxes

If you plan ahead, you can minimize the amount of your estate that goes to Uncle Sam and maximize the amount that goes to Aunt Sally. Clever structuring of flexible retirement accounts such as a Roth IRA can help funnel more tax-free money to your heirs, while other tax-planning strategies such as strategic charitable giving can help you mitigate the tax bite. Now is a particularly advantageous time for a Roth IRA conversion due to some changes in the tax code and historically low tax rates, though this strategy won’t work for everyone.


Prevents Family Squabbles

Your family may normally get along well, but it’s still wise to write a will so that things remain that way. The possibility of a cash grab may rile up some relatives, while others may hide a sentimental treasure that they hope goes unnoticed. Regardless of your wealth, careful estate planning helps prevent your family from squabbling, whether it’s a little tiff or an all-out lawsuit.


Clarifies Your Directives

Part of the value of the will is telling people how you feel about them and what they meant to you. You may have always intended for your niece Bertha to get that heirloom, but unless it’s written out in the estate, anyone can make a dash for it. An estate plan ensures your assets go to the person you want to have them. By clearly spelling out your wishes – often with the help of a lawyer you can help your loved ones remember you fondly or at least get what you intended.


Avoids the Time and Expense of Probate Court

Set up your estate right – think, a well-crafted trust and you’ll sail through probate court, likely the most annoying and time-consuming step of the entire process. Because of the ease of using a trust, more and more people are doing an end-run around the hassles of probate and setting up their assets this way. Plus, you don’t need as much wealth as you might think to make it worthwhile.


Keeps Your Family Assets Together

Trusts can also be a valuable way to ensure that your money stays in the family. Structured correctly, a trust can keep a profligate nephew from blowing your lifetime of hard work in a few years. It may also keep money in the family, if a spouse tries to extract some of it.


Protects Your Heirs

A good estate plan can also protect your heirs in a number of ways. If your children are minors, your estate plan can instruct who will take care of them and how they will receive money. It can also protect heirs from recrimination, if a relative would otherwise accuse them of stealing. A living will can also help heirs avoid some of the difficult health decisions during a parent’s end of life.


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