5 Tips to Start Your Estate Planning Today

No matter your age or financial situation, you need to be financially prepared for the inevitable.

Estate planning can seem daunting and overwhelming. It may even conjure up negative emotions for some. Perhaps that's why an estimated 64% of Americans don't have a will or any type of estate plan in place. Unfortunately, that means a majority of the population is at risk of leaving their families or business partners a great deal of work should anything happen to them. This includes seeking out documents, hiring lawyers and involving the court system to sort through all that is left behind.

While it may seem easier to neglect taking responsibility and let things fall through the cracks, estate planning is essential for everyone, regardless of your age, family ties or business situation. Putting a plan in place can ensure your assets are properly handled and family members are taken care of should something happen to you.

Below are my five recommendations on what you can do today to get your estate in order:

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Start Early

Many people are under the assumption that estate planning doesn't begin until later in life, perhaps close to retirement. The reality is that—similar to your overall financial plan—the process should begin during or near your 30s. Life is unpredictable, and having your plan in place earlier in life will not only ease your mind but the minds of those around you. Then, you can (and should) update things over the years, ensuring your assets are always accurately allocated.

Identify Key People

As you kick off the process, consider the people you'd like to include in your plan. This can range from key family members and friends to important business partners. This may be especially important if you are a small business owner and can fall into your succession planning. Once you identify your people, determine how the assets will be distributed between them, as well as who will be handling all the necessary paperwork. Also, ensure you check beneficiary designations on key accounts and documents, including retirement accounts, life insurance policies, etc.

Consider Qualifying Estate Items

When reviewing your portfolio, ensure you are taking every valuable item into consideration. These items can include real estate (your personal residence), entities (small businesses, corporations, LLCs, etc.), investment accounts and life insurance. Once you have taken a look at your entire estate, you can begin listing out these individual items and placing them into specific categories.

Be Specific

As your family will not be in the position to ask you questions, it's essential that your plan is accurate and as detailed as possible. This includes leaving your family or colleagues a list of online accounts and passwords, location of important documents and assets, as well as any potential contingencies for the receiving parties (i.e. can the item be sold, age restrictions, etc.).

Share Documents

Don't just stick your estate planning documents in a file cabinet and forget about them. Instead, provide copies to your trusted loved ones and professionals. If something were to happen to you, it's important that your documents are easily accessible to those who are closest to you. Along with copies of wills, trusts and beneficiary forms, you might also consider sharing a secured list of usernames and passwords with a family member or two that you trust. For enhanced security, consider using a password manager such as Dashlane or LastPass to store this information and share it with others as necessary.

While putting together an estate may not be a top priority for many, most people have an idea of how they'd like their assets allocated should something happen to them. The sooner you put a plan in place, the better. And, as is the case with any financial plan, an estate plan should be reviewed and updated, as needed based on life situations, including marriage, birth of a child, death of a spouse or new business venture.

See the original version of this article at www.definefinancial.com.

Taylor Schulte, CFP®, is founder and CEO of Define Financial, a San Diego-based fee-only firm. He is passionate about helping clients accumulate wealth and plan for retirement.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Taylor Schulte, CFP
Founder and CEO, Define Financial

Taylor Schulte, CFP®, is founder and CEO of Define Financial, a fee-only wealth management firm in San Diego. In addition, Schulte hosts The Stay Wealthy Retirement Podcast, teaching people how to reduce taxes, invest smarter, and make work optional. He has been recognized as a top 40 Under 40 adviser by InvestmentNews and one of the top 100 most influential advisers by Investopedia.