What Are the Seven Steps in the Estate Planning Process?

What Are the Seven Steps in the Estate Planning Process?

Posted on November 5, 2024 in estate planning

Starting the estate planning process can be overwhelming, especially if you are attempting to do so on your own. Having an experienced Las Vegas estate planning lawyer by your side throughout this process can make everything go a lot more smoothly. Still, it is important to understand and know how the estate planning process actually works. You may want to ask, “What are the seven steps in the estate planning process?” Knowing these steps can help you prepare for a meeting with an estate planning lawyer.

What Is Estate Planning?

Estate planning is the act of preparing for your eventual demise by developing a comprehensive plan for your asset distribution, wills, trusts, life insurance, power of attorney, and even funeral arrangements. An estate plan takes care of everything that needs to be taken care of.

Developing an estate plan is not the same as notarizing a last will and testament. A will is often a significant part of an estate plan, but you may decide to go with a trust instead. It is entirely up to you.

The Seven Steps of Estate Planning

Working out a comprehensive and detailed estate plan is no easy task. It can seem overwhelming at times, which is why the assistance of an estate planning lawyer can really be indispensable. There are seven essential steps in the estate planning process that cannot be missed. Understanding each of them is paramount to the entire process. Here are those seven steps:

1. Clearly Define Your Goals: No two estate plans are the same, as every individual’s needs and relationship with their family are different. Some estate plans may be designed solely to avoid one’s family getting a single cent. Others may be designed so that nobody can prevent one’s family from getting everything. It is important to clearly lay out your goals and objectives for your estate plan.
2. Create a Will: If you have not done so already, you should now draft your last will and testament. This is a vital step in the estate planning process. A will details exactly how you want your assets distributed upon your death and who in your family will be receiving those assets. You need to make sure your current will reflects your current intentions. If those intentions ever change, you need to keep your will updated to reflect them.
3. Create a Trust: Trusts are important tools that can protect your assets, avoid some estate taxes, and provide easy access for your beneficiaries. We can help you determine the kind of trust that suits your needs. A trust allows for more control over asset distribution than a will might.
4. Choose the Beneficiaries: It is important that you actively participate in the designation of your beneficiaries. You have to name everyone to whom you intend to leave something. Providing clear names for your asset distribution can avoid a lengthy probate process, among other potential complications.
5. Designate a Power of Attorney: Planning for the potential of your incapacitation may seem morbid, but it’s an important step in the process. You need to designate someone to have power of attorney over your medical needs in the unfortunate event that you are medically incapacitated and can no longer make your own decisions. Knowing your medical needs will be taken care of in such situations can give you peace and reassurance.
6. Strategize for Estate Taxes: It is important to recognize the potential estate taxes on your assets and have a plan in place to deal with those when the time comes. Estate taxes can take a sizable amount out of the total assets you intend to leave to your loved ones. We can devise a strategy to deal with those taxes.
7. Review the Plan Frequently: Estate planning is a process that is virtually ongoing until you pass away. You should always be revising it and reviewing it to reflect your current thoughts and feelings.

FAQs

Q: What Does a Proper Estate Plan Include?

A: In Nevada, a proper, solid estate plan will include solutions for nearly every eventuality that could occur. Estate plans have many legal methods of addressing these issues, including:

• A last will and testament
• A living trust
• An appointee for power of attorney
• Funeral instructions
• A designation of a representative to handle probate and the distribution of assets

Q: What Is the Five or Five Rule in Estate Planning?

A: The “five or five” rule in estate planning refers to a clause that allows the designated beneficiary to withdraw a certain amount of money from the living trust on a yearly basis. They can withdraw either $5,000 or five percent of the trust’s fair market value every year. Generally, they can take whichever is the higher amount.

Q: What Is the Most Difficult Step in Estate Planning?

A: The most difficult step in estate planning is going to be different for everyone. Some people may find it difficult to draft a will or establish a trust. Others may have trouble naming their beneficiaries. Mostly, though, the hardest part tends to be sharing the plan with their families. It can be difficult to discuss death with your loved ones, but they need to know what the plan is for your assets after you pass.

Q: Which Is the Most Crucial Step in Estate Planning?

A: Which step of the estate planning process is the most crucial will be different for everyone. However, every step is vitally important to your plan’s success and later implementation. For many, the most important step in the process is finalizing the will. Usually, the will is the part that will be used the most for asset distribution. Without the will, it can be very difficult to know what your wishes were.

Contact an Experienced Estate Planning Lawyer Today

It is very important for your asset distribution to have a solid estate plan in place before you pass away. An estate plan makes sure your wishes are followed as closely as they possibly can be. A good estate planning lawyer can help you put a plan together that greatly benefits your beneficiaries and distributes your assets according to your specifications. The legal team at Ken R. Ashworth & Associates knows how to accomplish your estate planning goals. Contact us to schedule a consultation today.