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You should not plan your estate in a haphazard manner. Rather, you should follow the following seven steps in order to plan your estate as efficiently and effectively as possible:

1. CHOOSE YOUR ESTATE PLANNING TEAM. Other than yourself, your estate planning attorney is the most important member of your estate planning team. Depending on the size and complexity of your estate, your attorney may recommend that you retain one or more of the following professionals to join the team: accountant, life insurance underwriter, trust officer, charitable officer and/or financial planner. If you do not have connections to one or more of these professionals, your attorney will be able make a recommendation. You are the "captain" of your estate planning team.

2. COLLECT AND ORGANIZE INFORMATION. You should gather up-to-date information on the following:

  • Your and your beneficiaries, names and ages

  • Your assets and liabilities

  • Your desired beneficiaries in the event of your death

  • Your desired guardians for your children in the event of your death

  • Your desired executor of your estate

  • Your desired trustee in the event you intend to set up a living trust

  • Timing and amount of desired distributions to your children

  • Charitable bequests

You should also gather information to educate yourself regarding your estate planning options, such as articles explaining living trusts, charitable remainder trusts, and irrevocable life insurance trusts. Your attorney may be able to direct you to some useful materials.

3. ANALYZE THE INFORMATION. After you have gathered the information from Step 2 and provided it to your attorney, your attorney will assist you in running some scenarios regarding what would happen to your estate, family, and business if you die tomorrow. Projections can also be run concerning what will happen if you die five years from now, assuming a reasonable rate of grown of your net worth. Various estate planning tools to remove assets from your estate and reduce estate taxes will be discussed and compared.

4. YOUR ATTORNEY RECOMMENDS A COURSE OF ACTION. Your attorney will take the information regarding your assets and liabilities, estate planning objectives, and estate planning tools, and make recommendations to you regarding the tools which should be implemented to achieve your objectives.

5. YOU DECIDE. You choose the estate planning tools you wish to utilize to achieve your estate planning objectives and minimize probate and estate tax concerns.

6. IMPLEMENTATION. Your attorney sets your decisions into motion by drafting the necessary will, trust documents, and asset transfer documents. You then meet with your attorney to review the documents and have all of your questions answered. You then sign the final wills, trust documents, and documents required to transfer your assets into your trust. Any life insurance required under your estate plan is purchased, and your investments are changed if required under your estate plan.

7. PERIODIC REVIEW. You should not put your estate plan in a filing cabinet and never look at it again. Rather, you should meet with your attorney to review the plan and your inevitably changed circumstances on a periodic basis. Even the best laid plans change over time. Your estate plan will be drafted with the intention that it will be "tweaked" from time to time to best achieve your estate-planning objective.

Estate Planning