Just What in the World is Estate Planning?

The most basic definition of estate planning is the putting in place of a plan for the disposition of your assets after you have passed. However, well-thought-out estate planning involves working with an estate planning attorney, a tax advisor, a financial professional, and others who might be involved given your specific circumstance.

What is the process?

The process of planning your estate will typically begin with an initial consultation with an attorney. In this meeting you are likely to discuss, in approximate terms, your net worth and estate planning goals.

If you are comfortable with the attorney you will then schedule a follow-up meeting with either the attorney or his or her paralegal to get a more detailed description of your assets, debts, and distribution plan ideas.

After the law firm has this information, they may contact your CPA or tax advisor and/or your financial advisor to make sure that the goals that you have discussed with these other professionals are in line with the goals expressed to the attorney.

Once the attorney has gathered all of this information, they will typically go to their inventory of estate planning tools and propose one or two ideas to you to successfully execute your wishes.

Financial Tools can be helpful.

It is very helpful at this point, if your attorney is familiar with various financial instruments such as annuities, variable annuities, life insurance, mutual funds, 401(k) s, IRAs, etc. An attorney who is not familiar with these may very well set up estate planning documents that do not work cohesively with your financial accounts.

This is one of the reasons that I personally became life insurance licensed. I also hold several securities designations. I understand the power of many of these financial instruments.

Your Attorney does his work.

If the plan makes sense then the attorney and his staff will work to create the plan documents and schedule a time for you to come in and review them. At this time, it would be wise to take the time to review the documents, especially checking for spellings of various family names.

If the documents are all in order, and the necessary people are available, you may be able to sign them in this appointment. However, if your plan is complex requiring multiple documents you may want to take your documents home and review them with family members prior to execution.

A thorough estate planning process in which the most basic documents are used should cost at least $1000.00. Any less and you have not hired an attorney, nor paid for legal advice. You’ve merely hired a document drafter who is looking to turn a quick buck on a simple document.

A more complex estate plan can run into the tens of thousands of dollars depending on your goals, tax situation, and the size of your estate. On average a good estate plan will run from $2,000.00 to $10,000.00