Puzzle Piece #3

Retirement Puzzle Piece #5

Proper Estate Planning

Learning Video: Proper Estate Planning Part 1

The Importance of Estate Planning

People always talk about their plans for retirement. And they spend a good portion of their lives saving money in retirement accounts so they can maintain their lifestyles in later years. But planning for the future isn’t just about retirement accounts or what to do with all of your free time.

But planning for the future isn’t just about retirement accounts or what you want to do with all of your free time.

People also need to plan for what comes after their retirement. What we might call “end-of-life planning.”

Unfortunately, many people don’t want to talk about their own mortality, so they avoid planning for it.

Most of us assume you only need an estate plan if you have money. But an “estate” is basically anything you own. Possessions that you have accumulated in life. And whether you’re single, married, divorced, remarried, an only child, one of six siblings, have a life partner or children; Estate Planning is important

Many people believe their estate planning is complete if they merely draw up a will. But it’s much more complicated than that. I teach people that they first need to plan for their now money, then their later money and finally their never money, or money they don’t plan to touch during their lifetimes.

The best definition of 'The Perfect Estate Plan'

To control your property while you’re alive.
Take care of your loved ones and yourself should you become disabled.
Give what you have to whom you want, the way you want, when you want.
Avoid every family feud possible.
And, save every tax dollar, professional fee and court cost possible.

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Simply put: An estate plan is a set of legal documents that allows you to leave instructions regarding your care if you can’t speak for yourself and distribution of your assets if you die. That might include a will, trust, living will, health-care proxy, documents for guardianship of children or pets, and funeral instructions.

Without proper planning, you leave your estate squarely in the lap of the Legal System and the IRS. That could result in a significant negative impact on you while living and on the value your estate after you’re gone.

Most of us assume you only need an estate plan if you have money. But an “estate” is basically anything you own. And whether you’re single, married, divorced, remarried, an only child, one of six siblings, have a life partner or children; Estate Planning is still important.

The Statute of Intestate

Should you pass away without so much as a will, the unfortunate reality is that under the statute of “Intestate”,             state law will determine how your property is distributed. And, your state legal system will take control of your estate if you should become disabled or incompetent.

If you fall under this statute of “Intestate” when you pass away because you do not have so much as a will, it means that neither you nor your family will be the ones to ultimately decide what happens to your assets, your children, and your financial legacy. Instead those decisions will be made binding by your state government and your least favorite uncle….Uncle Sam.

And, I think it’s safe to say that your personal wishes for the disposition of your wealth, your estate, the care of your children and how you want to be remembered all will not be exactly the same as your state government’s opinion.

Dying without a will would put your family through an extremely difficult, time-consuming, and expensive ordeal in probate court. All at a time when they should be focusing instead on celebrating your life and the wonderful memories you’ve left behind.

The Four Steps to Estate and Legacy Planning

Step 1: Plan for Maximum Wealth Preservation at Death
Step 2: Plan for an efficient Distribution of Assets at Death
Step 3: Plan to minimize Income Tax, Estate Tax and Probate Costs at Death
Step 4: Establish the proper Legal Framework to put everything in place

Getting started

Estate Attorneys draw up wills and trusts.
Accountants deal with taxes.
Financial advisors handle investments.

Insurance specialists quarterback the legacy planning. That is, maximize your wealth and protect it from taxation so more can be handed down efficiently to future generations.

Finding a good estate and legacy planner in no different than finding a good doctor.

Estate and legacy planning starts with a frank discussion between client and planner. To what degree is the person taking the time to get to know your situation? Your estate and legacy planner needs to be someone you trust to tell your dirty secrets. They need to understand why you are making the choices.

You can write your own estate plan, but experts recommend against it. Estate planning is state-specific. That means that if you live in Colorado for example, Colorado law outlines how your assets are to be disposed of at death and how citizens in Colorado must deal with their affairs. While websites sell low-cost estate planning tool kits with forms, they are designed to be one-size-fits-all. They are not usually state specific.

How to Assemble the Retirement Puzzle for Financial Peace of Mind