How to Estate Plan

Estate planning is not just for the uber wealthy. It is for anyone that would like to have some form of plan or method for the beneficiaries to acquire their belongings when they pass. Your “Estate” is every asset, possession and piece of property you own. The types of assets and property in your estate can be broken down in to two categories, Probate and non-Probate.

Probate assets are those that do not have a formal beneficiary designation and therefore must pass through the probate process. Examples include your real property such as homes, land and any rental properties you may own. They also include most traditional banking accounts as well as typical business ownership interest. There are ways to move some of these assets out of your probate estate, such as a beneficiary deed, payable on death designations or transfer on death interest assignments. Most commonly and almost always, they include every piece of personal property found in your home; appliances, furniture, jewelry, artwork and more.

Non-probate assets are those that have a formal beneficiary designation requirement. These are your life insurance policies, 401k and IRA accounts, pension benefits and other traditional retirement accounts and benefits. These almost always pass around the probate process and directly to your beneficiary.

Seems like a lot of loose ends to worry about and constantly check on. This is why estate planning can be so beneficial to families regardless of estate size. With a will or revocable living trust we can coordinate a roadmap for your family members to account for all of your property and assets. As well as a plan for them to follow in the acquisition and distribution of those assets to the correct beneficiaries.

With a Trust based estate plan, you are also able to help transform the method in which your beneficiaries receive their inheritance. Did you know that if your child is over 18 and is the beneficiary of your retirement account or life insurance policy they simply receive those funds in cash outright with no stipulations? Typically not a parents intention to leave their teenage child a very large sum in cash. With a Trust you are able to collect those same cash payouts, but place a timeline in which the child may use or access the funds and set parameters for what they may be used for, like education costs.

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