7 Steps To Creating A Good Estate Plan

We have previously established that Estate Planning is one of the most important steps you can take to ensure that your wishes, as it relates to the distribution and use of your assets, are honoured and that your loved ones are adequately provided for in your absence. In this section, we will take you through the steps required in creating a good Estate Plan that will stand the test of time.

  • Assess your need for an Estate Plan
  • When considering Estate Planning, the first step is to determine if you need an Estate Plan. This can be done by assessing your current financial condition and financial status, which will involve calculating your net worth.

    Depending on your financial status, we believe calculating your net worth should be pretty easy though you might need the help of a professional.

    Your net worth will involve a rough estimate of the values of all of your assets – including but not limited to: bank and investment accounts, personal property (Jewelry, Collectibles, Cars, Boats), retirement plans, face value of life insurance, business interest, monies owed to you, mining and oil rights, and real estate – and then subtracting all of your liabilities – credit and debit cards, all personal loans, margin facilities and mortgages – from the total assets.

  • Find a qualified Estate Planning Advisor
  • As part of your Estate Plan, you will need to decide who should be in charge of carrying out your wishes. Estate Planning in itself is a complicated process that requires professional guidance.

    This is not the time to consider cost, try to do it yourself or even to use a cheap person or company, as the legal implications of one wrong word or paragraph or one missing signature can be very costly.

    You will need help from a competent professional, preferably a Trustee Company with experience and capability, who will take you through all of the choices you need to make in creating a good Estate Plan that will work for you.

    Selecting the right person or company is probably more important than deciding who gets what and when they get it. If you make a wrong choice here, all of the good money and time you have spent on your Estate Plan will have been wasted.

  • Create a foundational Estate Plan
  • The Estate Planner of your choice should help you create a foundational Estate Plan. A foundational Estate Plan involves creating a plan for what happens if you become disabled and a plan for what happens after you die. It is the base upon which a successful plan is built.

    The foundational plan is all about protecting you and your loved ones from unnecessary expense and the delay associated with government interfering with your estate. It also means keeping control of your assets and rights for as long as possible and naming those who will be responsible for caring for you in times of need.

    It creates a system to keep you independent and protect what you have worked so hard for from the clutches of predators and the government. It also provides a system to protect your children if anything happens to you. Disability planning is a vital part of any Estate Plan though it is often given less attention.

    Without a solid disability plan, your assets could end up in a court -supervised guardianship or your loved ones could lose control over you (during period of incapacity) and your property.

  • Assess your need for an advanced plan
  • When you have created and put in place a foundational Estate Plan, the next step will be to determine if you need an advanced Estate Plan. An advanced Estate Plan primarily focuses on reducing transfer taxes and income taxes.

    Aside from this, advanced Estate Planning will enable you perpetuate family values and protect assets for the benefit of future generations.

    You will need to have further discussions with your Trustee who is in a better position to integrate an advanced plan with the foundational Estate Plan. However, people get so overwhelmed by the initial Estate Planning process that they will not even bother to focus on an advanced plan.

    Whether you implement an advanced Estate Planning or not, you should explore all of your options with your Trustee Company and then make your decision based upon what you believe will work not only for you but also for your family.

  • Determine if you need a Will or a Trust
  • Once you have contacted a competent Estate Planning professional, the next step is for you to determine if you require a Will or a Trust.

    With the help of your Estate Planning professional, you should be able to weigh the pros and cons of your decisions, we recommend the use of a Trust in planning your Estate because of probate issues.

  • Fund your Trust
  • If you have gotten this far, and have decided to use a Trust rather than a Will, you will need to get your assets titled into the name of your Trust and update the beneficiaries of your life insurance policies and retirement accounts to align with the provisions of your Trust.

    If you do not do this, then all of the hard work that you have put into the first five processes will amount to nothing. Funding your account should not take you eternity. We recommend a minimum of eight weeks and a maximum of six months for you to fund your Trust.

  • Review and update your Estate Plan
  • This is because things change daily, completing steps one to six does not imply that you have finished your Estate Plan. In effect, the Estate Plan that you have created today will only be effective for the now.

    In one year you would have gone through a multitude of experiences, both good and bad, that will make today’s perfect plan not so perfect tomorrow.

    Do not be carried away by the initial success achieved as Estate Planning is a lifelong process, not a one-off deal. Your plan needs to change as situations in your life changes. Remember that an Estate Plan for today will only be worth the paper it is written on tomorrow.

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