Wondering how to get started on your estate planning? One excellent way to get it moving forward is simply to ask yourself a series of questions about your goals for the process. This gets you thinking about where you’re heading, and you can then work backward to create an estate plan that gets you there and meets those goals. This makes it feel far more realistic and less overwhelming.
1. Do your heirs get along with one another?
First and foremost, are there any problems that you need to address up front, or do your heirs generally get along? If they already tend to fight and argue, that is likely to continue to be the case with money on the line. You want to lower the odds of an estate dispute by being very specific and talking with the children in advance so that they know what to expect. It can also help to give everyone equal bequests so that they have no grounds to dispute what someone else received.
2. What are your goals for your children?
You can use something like an incentive trust to push them toward these goals. It directly rewards them for doing things like going to school or avoiding legal trouble. Even without incentives, you can still structure your plan so that it addresses those goals. If college is a goal, for instance, an educational trust makes it more affordable.
3. Are your heirs actually prepared to deal with financial assets?
Your heirs may be too young to handle the amount of wealth you plan to leave them. If so, you may need to use a trust to control when it passes to them or what they can use it for. People often do this with minors. You may understandably worry about leaving money to a teenager, for instance, so a trust can hold that money until the person turns 21 or 25.
4. When you’re gone, who do you hope your heirs become? What type of people do you hope they turn into?
You can structure your plan so that it gives them the opportunities you want for them. As noted above, educational trusts help heirs go to college, but you could also leave money for them to start businesses, buy homes, start families, get married and meet all sorts of other milestones. You can still influence who they become and how they live their lives, whether or not you’re with them.
Has this helped you start thinking about your estate planning? If so, make sure you know what legal steps to take.