You Have a Will – Is It Time for an Estate Plan?

An estate plan takes your will a step further to account for more than just your possessions. It provides clarity to your estate and can help head off potential future family battles.

Most people have a will. But a simple will often doesn’t cover some complex issues facing your heirs, which is why I recommend an estate plan.

I work with doctors, accountants and other professionals, small-business owners and people getting ready to retire. They may have a will and a trust for their children, but an estate plan answers three fundamental questions:

  • What you want to happen after you pass away;
  • Why you want it to happen;
  • Who will ensure it happens.

Most people have legal documents that answer the first question; in addition to a will, these include powers of attorney, a health care directive and trusts. But these documents rarely explain the intent or reasons for choosing to give money, property and other assets to some people and not others.

An estate plan provides clarity about each heir to your estate. And this can be particularly important if the deceased person had multiple marriages and families. In addition, with a plan in place, you and your heirs will likely pay substantially less in taxes, fees and court costs and avoid nasty family battles over your assets after you are gone.

Here are four tasks you’ll need to complete to get started:

1. Make a Current Statement of Net Worth

This is a complete list of all assets, debts and life insurance. Assets will range from houses and personal property to retirement and bank accounts. Debts will include any loans – a mortgage, home equity, car or credit card debt.

Include the approximate value of each asset as well as the current owner(s) and any beneficiaries. For example, it’s likely that a married couple will jointly own their house. But when it comes to retirement accounts, 401(k) or individual retirement accounts, most will be in the name of each individual.

It’s vital to account for every asset, even some of the smallest ones. For example, in a California case, two siblings spent almost 10 years in court and over $750,000 on legal fees in a dispute over who should inherit their father’s surfboard. If the father had spelled out the heir in his will, they would have likely avoided financing an attorney’s vacation home!

2. Write Letter of Intent and Instruction

After a person has died, disputes often arise. Even if a particular piece of property is given to one person, other heirs often will argue that “Mom and Dad really wanted me to have it.”

Writing a letter that explains the reasons — and the intent — for choosing to give a particular asset to a person can forestall needless family strife and legal challenges. If possible, the letter should provide as many details as possible. For example, if you have decided to give an heirloom or other sentimental piece of property to only one person, state the reasons and intent behind this gift.

3. Choose the Right Decision-Makers

Several people may play key roles in enacting your estate plan, including the executor, as well as possibly a trustee and guardian.

The executor, who will serve as your personal representative, often has a complex role. They will need to make important, time-sensitive decisions while the burden of losing a loved one weighs on their emotions. Because of this situation, it may be difficult for a spouse to carry out these duties.

If the estate plan includes a trust, a trustee can be chosen to oversee it if your heirs may not have the financial ability to properly manage millions of dollars or other new assets. If you don’t know someone who can fill this role, consider a professional, such as a bank or corporate trustee.

The guardian will have legal responsibility for any minor children. If you have minor children, this position requires the most forethought and consideration. The guardian will in many ways be stepping into the role as parent.

If you would like your children to attend private schools, and a life insurance policy provides them the money to do that, the trustee and guardian will work together to carry out your wish. Also, any instructions should provide context to help the trustee and guardian make the best decisions. For example, if you provide funds for a car that provides “reasonable comfort,” it could mean a Honda Accord for one person and a Mercedes-Benz to another.

Once you’ve decided on a person for each role, speak with them prior to signing your legal documents to ensure they understand their responsibilities.

4. Make Regular Updates to Your Plan.

Review your estate plan at least every five years and at “milestone” events, such as marriage, divorce and new children. Also, make certain to regularly update beneficiaries and potential decision-makers.

Unfortunately, many people work hard to develop a plan, but even after several years, fail to update important information. Work with your financial adviser to ensure your estate plan is implemented. Otherwise, an estate plan that gathers dust over years is an expensive pile of paperwork.

About the Author

Jason R. Cross, CFP®, CTFA

Wealth Adviser, Brightworth LLC

Jason Cross is a wealth adviser at McGill Advisors, a division of Brightworth. He works with high-net-worth families in investment management and estate planning and helps business owners develop financial plans to sell their businesses. Jason is a Certified Financial Planner™, Certified Trust and Financial Advisor and an active member of the Georgia Bar Association.

Most Popular

The Perfect Storm for Retirees
retirement planning

The Perfect Storm for Retirees

Today’s retirees could face a perfect storm because they are living longer and spending more time in retirement, while at the same time losing access …
April 18, 2021
The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021


Wealthy Should Act Now to Prepare for Bernie Sanders’s Estate Tax Proposal
estate planning

Wealthy Should Act Now to Prepare for Bernie Sanders’s Estate Tax Proposal

Anyone with an estate of $3.5 million or more should think about getting in line now to talk to an estate professional, because offices everywhere are…
April 18, 2021
Worried about Your Child’s Inheritance If They Divorce? A Trust Can Be Your Answer
estate planning

Worried about Your Child’s Inheritance If They Divorce? A Trust Can Be Your Answer

You may love your son-in-law or daughter-in-law now, but that could change down the road. So, if you don’t want your money going to your kid’s future …
April 16, 2021
What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
37 Ways to Earn Extra Cash in 2021

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021