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The Need-to-Knows for Estate Planning

Estate Planning

Estate planning can be a scary topic to discuss. After all, it’s tough to talk about what happens to your possessions after you’re gone. But it is an essential part financial planning — to make sure your loved ones are taken care of in your absence.

It’s a complex process as well, with a variety of taxes and classifications to factor into each decision. Before jumping into action to start your planning, understanding key steps and components is essential in the process.

Set up your team

Every estate starts with a will or trust. To create one properly, it’s beneficial to find a reputable attorney and possibly a tax adviser to help along the way. Creating a will may seem simple, but an attorney can create the necessary documents, communicate your desires in a clear manner and minimize potential mistakes. Also, as time goes on or circumstances change, attorneys can help you make adjustments. As we’ll discuss below, tax advisers will figure out ways to minimize taxes and fees.

Your team will guide you through each step and decision, allowing you to choose the right options without worrying if you missed something. Using your team may be a bit costly upfront, but it’ll be well worth it to leave a well-thought-out, thorough plan behind.

Take note of assets, liabilities

Your estate includes all of the good — and even some of the bad. You’ll need to take stock of each while you go through the planning process. To do this, calculate your net worth. Your net worth is your assets minus liabilities. Assets include bank accounts, property, personal items (car, house, boat), retirement plans (401(k), IRAs), life insurance and more. Liabilities can include credit card debt and other types of loans. 

Your net worth will help you determine the amount of tax owed on the estate. This is where your tax adviser can come in handy. They can help you determine how to minimize those taxes and maximize your estate.

After you’ve decided where to put your money and how to classify it for tax purposes, banks have investment sides that can potentially help your money grow or maintain value. 

Circumstances change; so should your estate

After you’ve gone through the steps with an attorney and adviser, keep up with the hard work you’ve done. Life changes — you could get divorced, win the lottery or a whole number of other things — and you might want to review and update beneficiaries, terms or something else. Tax laws are also subject to change, which could have a large effect on how your estate looks.

Review your estate on a frequent basis, maybe every few years, to see where adjustments need to be made. The planning shouldn’t end after your first draft. It should be modified as your life necessitates. And hopefully, when it’s time for the estate to change hands, you’ll have created a clear plan for your beneficiaries.

To get starting on your own estate planning, sit down with Mark Parker, a certified financial planner. Contact him at 515-386-5457 or For more information, visit our webpage: