Creating an estate plan does not necessarily require a substantial commitment of time or money.
Most often, an estate plan can be constructed by following these six simple steps:
Step 1: Prepare an inventory of assets and liabilities
An inventory of your assets and liabilities is necessary for various elements of your estate plan, including tax minimization and Will planning.
Step 2: Define your estate planning objectives.
When developing your estate plan, you should consider both personal and financial objectives that you wish to achieve with your plan.
Step 3: Evaluate your objectives.
Once you have clearly defined your estate objectives, the next step is to determine how your objectives can be achieved based on your current financial position. In conjunction with your objectives, you will need to consider other factors such as inflation, tax liabilities and U.S. Estate Tax.
Step 4: Determine how to achieve your objectives.
Your action plan will result from the issues identified in your estate evaluation conducted in Step 3. The fundamental component of your action plan will likely be creating a Will (link to Will Writing eBook) or, if you currently have a Will, at least a review of the document. A significant number of potential issues can be easily resolved through a well-constructed Will.
Step 5: Use the right advisors to implement your plan.
This step is crucial to ensuring that your estate plan is properly implemented. You may require the assistance of several professionals, including an estates lawyer (or notary in the province of Quebec), an accountant, a financial planner, a trust officer and your investment advisor. As you seek out these advisors, make sure you select individuals with an expertise in estate planning.
Step 6: Periodically review your plan.
As a final step, you should always remain vigilant and cognizant that changes in your personal situation and in legislation may require changes to your overall estate plan. Periodic revisions are a must to ensure that your estate plan is still attaining your objectives.