October 30, 2019

Basics of Estate Planning Part 2


You work hard to build an estate during a lifetime. Ensure that your assets pass into the right hands. Whether you want to transfer ownership to loved ones, friends, charities, or other organizations, you should have a plan. Without one, you might burden heirs with more time, increased costs, and greater uncertainty in settling your estate.

Planning does not need to be a complex process. In fact, estate planning can be rewarding if you understand the basics and have the support of capable and experienced professionals. This post is part of a series started during National Estate Planning Awareness Week. Follow our blog to read the entire series as we share basic information about estate planning.

This blog post presents an introduction and overview of basic concepts. It is provided for educational purposes only. It is not intended to be legal, financial, or tax advice. Information is accurate as of the time of writing the post and is subject to change without notice. We recommend that you consult a professional estate planner, financial advisor, tax advisor, or estate planning attorney to discuss your specific situation.


We wrote about setting goals in the first post of this series. Before you can begin planning, you need to know what you want to achieve. Knowing will help you maintain focus, and it will also help your attorney or tax advisor by setting clear expectations for your work together.

In this post, we dive into evaluating your estate and the most common estate planning documents. We explain how you can estimate the value of your estate. We also cover the legal agreements most commonly used to carry out an estate plan.


Once you set goals, you should identify sources of value by taking an inventory of your assets. You will not understand the value of your estate if you do not know what you own. These assets might include anything and everything in which you have an ownership interest: financial accounts, real estate, business interests, personal property, insurance policies, annuities, trusts, and even joint accounts.

We encourage you to keep a list of your assets. You can track the approximate values, if you share ownership with anyone else, associated accounts (like online access for websites or mobile apps), and approximate values after outstanding debts or remaining balances. If you anticipate any changes in your assets, then make sure to note the expected changes, too. Consider combining your asset inventory with your list of goals for simpler tracking. This way, you stay organized and make it easier to share with advisors and loved ones.

At this point in the estate planning process, you might also consider the impact of taxes on your estate value. Local, state, and federal taxes can impact the overall value of what you leave behind. Consider, for example, federal transfer taxes for estates, gifts, and generation-skipping transfers in addition to any state or local taxes. States may impose taxes for gifts, estates, inheritance, or any combination of these situations. We recommend consulting an estate planning professional and tax advisor to learn more.



After you set goals and evaluate your estate, you need to gather the right documents to carry out your estate plan. Legal documents direct how your assets should be passed to beneficiaries. Most commonly, estate plans include a will and a trust. However, every estate is unique and we recommend consulting an attorney and tax advisor for more information.

A will, also known as a Last Will and Testament, directs how your assets should be administered after your death, including to whom and under what circumstances. When a person dies without a will, this is called dying “intestate”. When a person passes away intestate, state-specific laws determine how to distribute assets without any guarantee that distribution will reflect intentions or desires of the deceased.

A trust creates a legal arrangement through which a third party holds assets on behalf of a beneficiary. The party appointed to manage the assets is called the trustee and must act according to the terms of the trust documents. The trust documents also dictate when the trustee should transfer assets to a beneficiary. The terms of a trust can be tailored on an individual basis. Often, trusts aim to reduce the impact of taxes on estate value. However, estate planning professionals may advise using a trust for other reasons as well.

Other important documents might include asset titles, beneficiary designations, guardianship designations, custodianship agreements, and other legal agreements for less common situations. Many of the documents address asset ownership or financial matters, while others address the care of children or adults incapable of self-care. We recommend consulting an attorney or tax advisor to understand what documents you may consider for your estate plan.



In future posts, we will take a deeper dive into the legal agreements that bind an estate plan and common strategies of estate planning. We will cover how transfer may happen, distributions, and beneficiaries. We will also review the different types of trusts and wills that you may encounter in estate planning.

Remember, our blog posts are provided for educational purposes only. Posts are not intended to be legal, financial, or tax advice. If you have questions, please consult a qualified professional. Information is accurate as of the time of writing the post and is subject to change without notice.


Related Posts.