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The Easy Way To Get Started On Your Estate Plan

Estate planning is one of those tasks that most of us put off for the future, either because we don’t want to think about our mortality, believe it’s too costly, or because it doesn’t seem necessary. In fact, only 51% of Americans have done any estate planning, (1) which means half the population is taking a huge risk when it comes to caring for their families and assets.

Regardless of how much or how little you have to your name, if you don’t create a plan, you are leaving your loved ones with legal headaches. For younger “Accumulator” although a complex topic at the intersection of many other parts of your financial plan, estate planning can really be boiled down to:

  1. What happens if I die?
  2. What happens if my spouse dies?
  3. What happens if we both die (at the same time, say in a car crash)?

If you are single, you only need to worry about point #1. In that case, a trust and/or will should address how you intend your assets be divided should you pass away, as well as protect your accumulated wealth and your intended beneficiaries from the process of probate through often impersonal judges. Unnecessary probate and taxes can often diminish the funds left behind. These rules vary from state to state so please seek appropriate legal counsel in your state of residence to clarify exactly what is best for your situation. With that said, the first step for most people is to:

Draft A Will

Everyone needs a will to spell out their wishes and name someone to handle their financial affairs. Each person’s will is unique and features different requests, but a few standard essentials to include are:

  • Guardianship. If you’re a parent of a young child, this can be one of the most important parts of your will. Here, you can name a legal guardian for your minor children should you pass away before they are legal adults.
  • Assets. In your will, you’ll define which heir gets what, including percentages of your savings, specific accounts, certain properties, cars, or other valuables and sentimental items.
  • Real Property. Beyond assets, you may also have homes and buildings that you want to leave to specific people.

Once your will is drafted, you’ll want to keep it up-to-date. Review it at least every two to three years and whenever there is a major life event, such as a marriage, divorce, death, or birth.

If you are married and/or have kids, the process becomes even more complex as the stakes are even higher. In these cases, and depending on your state of residence we often consider creating a trust.

Creating A Trust

Depending on what you want to accomplish with your assets and the specific needs of your situation, you may want to look into setting up a trust for your heirs. Contrary to popular belief, these are not just for the very wealthy. Trusts can be a wise way to ensure that the legacy you’re leaving behind is protected. There are also significant tax benefits in choosing trust funds, as money in trusts bypass probate.

You may consider setting up a Living Trust, also known as a revocable trust. In the event of your death, the trust ends and is distributed to designated beneficiaries, similar to that of a will, except that the process is quicker and the assets are not taxed. If you’d like to contribute some of your assets to a cause that is close to your heart, you may consider a Charitable Remainder Unitrust (CRUT). This not only aids a charity but also give you immediate tax breaks. (2)

Talk with an estate lawyer to help you determine which option is best for your situation.

Medical Directives

Without medical directives, families are left to guess how to handle end of life care. Most estate planning attorneys set these up when reviewing your will/trust. This will limit family in-fighting as your wishes will be displayed in writing for all to see and is a way of letting all those involved know your wishes.

Appoint Trustworthy People

The next decision you will need to make is choosing who you’d like to take care of things in the event of your death. Some people opt to have one person take on this responsibility, while others appoint different people to carry out various tasks. Some states have stipulations on who can serve in these roles, but often they are family members. (3) The primary responsibilities are:

  • Executor: This is the person who is legally responsible for carrying out your will. They will ensure that your assets are distributed to your heirs and that your valuable items are given to the people you intended.
  • Primary Agent: A durable power of attorney is a document that gives someone the legal ability to take care of your financial affairs if you are unable to do so. This person, called the primary agent, should be someone who is financially savvy and organized. They will handle any bills or income received and will follow your instructions laid out in the Durable Power of Attorney.
  • Health Care Proxy: Similar to a primary agent’s job to make financial decisions on your behalf, a healthcare proxy is someone you appoint to make medical decisions for you if you are unable to do so. These wishes can be laid out ahead of time in a document called a medical power of attorney.

Start a conversation with the people you trust most to handle your affairs and let them know that you are including them in these official documents.

Organize All Important Documents

It’s important to keep all of your estate planning documents safe and accessible when they’re needed. In one central location, organize all important documents, including:

  • Tax returns from the past seven years
  • Insurance policies
  • 401(k) statements
  • Bank account information
  • Mortgage paperwork
  • Loan documents
  • Brokerage statements
  • Social Security, health insurance, and Medicare cards
  • Contact information for your financial advisor, doctors, lawyer, and accountant
  • Will

Make sure your spouse or closest family member knows where to find this information or store them online in a trusted advisors vault. During times of stress and/or loss it is best to have someone familiar with all aspects of your financial life that can act as a quarterback between all other parties. That is why, even in the accumulation phase of your life we think most people should seek out expert help.

Rely On Experts

Estate planning involves many intricate details and time-consuming tasks, but don’t let that prevent you from getting your affairs in order when a professional is available to help. While it is possible to create wills online nowadays, there are often complex nuances to estate laws, and regulations differ from state to state. If you go this route, at least bring the completed documents to an attorney to review to make sure there are not any glaring holes as any legal documents, if enacted, will need to be followed very closely.

Although some go to an estate planning lawyer at the outset, we believe a true Holistic Wealth Management Firm can add value by guiding you through this process when building your initial financial plan. Personally, we have saved clients a lot of upfront money and have crafted complex plans that we then take directly to competent attorneys to implement.  At Accumulation Wealth Partners, we can help you sort through some of the different options to help you create the best plan for you and your loved ones.

While it may seem daunting, the process of thinking through your estate plan does not need to be complicated or stressful, and the ensuing benefits are invaluable.

Get Started Now

It is never too early to start putting a plan in place for your estate. Many families feel more confident when they made the decisions necessary to get a plan in place. Whether you are starting from square one or think it's time to update your will, I'd love to help you with your estate planning. Schedule a free 15-minute introductory phone call or contact our office by calling (858) 255-4475 or emailing scott@accumulationwealth.com.

About Scott

Scott Melbrod is the founder and CEO of Accumulation Wealth Partners, an independent wealth management firm in San Diego, CA. Working with a wide array of clients, from families to young Millennials just starting their careers, his mission is to provide impactful and targeted financial advice at a transparent cost to people in their accumulation phase of their lives. With more than 15 years of industry experience, he uses his knowledge to develop for his clients a structured and tailored plan designed to guide them toward financial freedom. Learn more about Scott by connecting with him on LinkedIn or emailing him at scott@accumulationwealth.com.


(1) http://wills-probate.lawyers.com/wills-probate-basics/lawyerscom-wills-and-estate-planning-survey-findings.html

(2) http://www.investopedia.com/terms/t/trust-fund.asp#ixzz4OrqKzEbu 

(3) http://www.elderlawanswers.com/the-five-components-of-a-good-estate-plan-9561