Four estate planning steps

Four estate planning steps

If you’re like most people, you’ll work your entire lifetime to accumulate assets: a home, cars, savings, real estate, investments, etc.

The comparatively small amount of time and money required to create an estate plan will help ensure that your assets are passed on – with the best possible tax consequences – to your beneficiaries.

A good estate plan will:

  • Ensure that your wealth reaches the individuals, or organizations, you select in the manner that you choose
  • Minimize the effect of federal and state taxes
  • Help to ensure settlement costs are paid without jeopardizing your family’s inheritance

Here are four basic estate planning steps.

Take an inventory of your assets

Your inventory should include your home, jewelry, any stocks and bonds, bank accounts, insurance policies, retirement plans, and other property; note how they are owned. Next, take a similar inventory of your debts and liabilities.

Here’s an estate planning tool that can help you track your assets.

Determine your estate goals

For example, do you want all your assets to go to your family? Do you want any assets to go to charity? Do any of your children have special educational, medical or financial needs?

Your goals can also be documented on the estate planning tool. More importantly, the final wishes need to be included in your will or trust.

Develop an organized plan for the payment of taxes and expenses

The payment of state and federal taxes cannot always be avoided. There are options for meeting tax liabilities:

  • Use existing liquid assets
  • Sell estate assets which could result in the assets being sold at a loss due to forced sale conditions
  • Life insurance is often the most cost-effective solution as it is generally income tax-free and can be used to pay taxes and estate settlement costs, thus protecting the value of your estate

Review your plan

At a minimum, your estate plan should be reviewed every three to five years or any time your life or circumstances change dramatically. Especially if you encounter any of the following changes in the following areas that alter your estate plan significantly:

  • Marital status
  • Ownership or value of property
  • Birth of a child or grandchild
  • Tax laws
  • Income or employment status
  • Business ownership
  • Relocation

Periodically reviewing any wills and trusts will ensure that your plan still accomplishes your goals in a tax-efficient manner.

Now is the time to plan

There is little that can be done after death to create a plan. By working with an Ohio National financial professional and planning ahead, you can enjoy the peace of mind knowing that a plan is in place to help preserve your estate for your beneficiaries.

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