When should I be concerned about estate planning?

 Right now.

At the very moment you read these words, you should be concerned about estate planning. Far too many of us neglect estate planning, thinking “my estate is too small.” Regardless of the size of your estate, it can benefit from thoughtful  and  inspired planning. The main concern of estate planning should be people first, and assets and taxes second. The people we are talking about are you and your loved ones. When most of us think of estate planning, we think of inheritances. An inheritance is what one person receives from another. It can be property, values, culture, or traditions. Inheritance is more than the transfer of land and other forms of wealth from one  generation to the next. It is also the transfer of heritage, love, and values. However, as we are all concerned with meeting the physical needs of our loved ones, the estate planning discussion typically begins with a discussion of our property and what we want to do with it.

Here are some of the many considerations in estate planning: wills, trusts, durable powers of attorney, living wills, advance directives, probate, life insurance, joint ownership, estate, inheritance and gift taxes, generation skipping taxes, income taxes, pensions, 401(k)s, IRAs, Roth IRAs, lump-sum distributions, executors, trustees, guardians for minor children, special needs beneficiaries, powers of appointment, special valuation of farms and businesses, collectibles, charitable giving, beneficiary designations, family limited partnerships, annuities, asset protection planning, disability, long-term care, Medicaid planning, buy-sell agreements, spend-thrift provisions, etc.  While the list is extensive, all of us can find some areas that touch our financial lives.  While the estate planning process is crucial for the financial well being of our loved ones, it need not be
intimidating.

The essential task of estate planning can be addressed in four phases: Identify, Plan, Implement, Review.  In the Identification phase, you should meet with a trusted financial advisor who will help you identify your property and help you clarify your goals and desires for using it to benefit your loved ones and other interests, such as charity.

In the Planning phase, your advisor will help you develop a written estate plan.

In the Implementation phase, your advisor will work with you and  your attorney in taking action steps to arrange your finances and property  to meet your goals.  For example, in this step you might sign wills or other estate planning documents. 

The final phase is  Review, and it is crucial, for estate planning is  a process  rather than a one time event. Your estate plan should be reviewed  when there is a significant change that affects your life. This could be the birth or death of  a loved one, a change in career, family, income, or health, a new tax law, etc. You should meet with your advisors to review your estate plan when these events occur.