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Estate Planning Basics

Estate Planning Basics

Generational Planning

Where there is a will, there is not just a way – there is also a legally binding plan to distribute your assets after you pass on. While many find the idea of sitting down to create a will an anxiety-provoking discussion, it can provide you with peace of mind. You can rest easy knowing that your wishes will be carried out as you have requested.

While some folks prefer a do-it-yourself approach, it is far from the best option for everyone. Since each state has its own set of laws and requirements, the various templates available may fall short of their claim to meet your state’s requirements. It is crucial that your estate plan meets your state’s legal requirements to ensure your final wishes are honored, so expert help is recommended. Consult with an estate planning attorney to ensure that documents are correctly prepared, avoiding costly and time-consuming missteps that may become part of the inheritance that you leave behind.

Before you sit down with a legal professional, here are some general guidelines you can think through independently. Estate planning is a complex field, but a general outline can clear up some of the mysteries.

Estate planning 101:

1. What do you want to accomplish?

Will you be providing for children under 18? Or are your beneficiaries young adults, older adults, relatives, or charities? Exactly how might you provide for your children? Options you may consider include a trust and/or a will.

What is a trust? Trusts provide control over the distribution of assets, privacy, and potential tax advantages. A trust is a fiduciary arrangement that allows a trustee to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways, specifying exactly how and when the assets pass to the heirs. For example, are you concerned that a young adult might fritter away their inheritance? A spendthrift trust might be the answer. Instead of an account that allows immediate access to the assets, the trustee of a spendthrift trust dispenses the assets over time. Additionally, a spendthrift trust typically protects assets from creditors, bankruptcy, divorce, and lawsuits.

Is there a need to minimize taxes? An irrevocable trust might fit into your plan. By placing assets into an irrevocable trust, the estate’s future value may be reduced when it comes to estate taxes. Besides tax considerations, irrevocable trusts also help protect assets in lawsuits. You may also decide to create a living trust, which transfers your assets to your beneficiaries and avoids probate. Other trusts that you may find advantageous include charitable trusts, special needs trusts, generation-skipping trusts, and bypass trusts. The latter two offer ways to reduce the estate tax.

You need a will. While trusts can be helpful estate planning tools, they are optional. In our view, a will is a must-have. A will is a legal document that takes effect upon your death. It outlines your wishes for what will be left behind. One of the most important parts of a will for parents of minor children is designating guardianship. The vast majority of our clients prefer not to have the courts decide for them. As we already mentioned, complexities abound. We would be delighted to answer any inquiries you may have. Again, consulting with an estate planning attorney can help you decide if a trust, a will, or both are best for securing your assets for your heirs. Don’t wait until it’s too late to secure the future of your loved ones. Take action today.

2. Have you taken stock of your possessions?

It’s important to create an inventory of your assets, such as bank accounts, insurance policies, investment accounts, and personal belongings.

3. Don’t avoid the difficult conversation.

If you were to pass away suddenly, do your loved ones have access to important documents, financial statements, etc.? It is important to inform your loved ones about the location of your will and the legal professionals who will handle the process. In other words, it’s important to ensure that your heirs won’t be forced to embark on an unexpected scavenger hunt in the event of your unexpected passing.

4. Choose the right executor or trustee

Select a trustworthy individual or institution to act on your behalf. You need someone dependable, trustworthy, organized, fair, and financially savvy. Identifying the best candidate can be made easier if you focus on these important attributes.

5. Be sure to designate and regularly update your beneficiaries.

It’s common to list a beneficiary or beneficiaries for an IRA and life insurance policy. However, it’s crucial to ensure that your designated beneficiaries align with your will. For instance, if the will you drafted last year names Bob as the recipient of your IRA at ABC Brokerage, but the beneficiary listed 15 years ago is Sally, Sally will be the recipient of the assets.

6. Prepare for medical decisions.

Estate planning isn’t complete unless you prepare legal documents such as a durable power of attorney for financial matters and a medical power of attorney, or healthcare proxy,

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Snyder Wealth Group

At Snyder Wealth Group, our investment philosophy is rooted in the principles of fiduciary duty, tailored strategies, and a long-term approach to wealth building. Our mission is to provide our clients with the highest level of service in financial planning and investment management, supported by 50 years of experience. As a fiduciary, we are committed to acting in your best interest, seeking the optimal financial strategy to help you achieve your goals.

About Us

At Snyder Wealth Group, our tagline is “Invest, Plan, Retire, Prosper.” We believe in helping our clients achieve financial prosperity throughout their lives.

Whether you’re just starting out in your career, planning for retirement, or somewhere in between, we can help you create a plan that will help you achieve your goals and live the life you want.

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