Estate planning isn’t only for the wealthy. In reality, everyone should have a purposeful strategy based on what matters most to them. An estate strategy can keep you, not the courts, in control of important decisions. The guide below can help you make appropriate decisions for you and the people and causes you care about.
A team approach
When developing and implementing estate strategies, we recommend establishing a team of professionals. Your team should include:
- Your financial advisor
- An estate-planning attorney
- A tax professional
Plan for the expected
Start by outlining what’s most important to you and working with a team of professionals — including your financial advisor, estate-planning attorney, and tax professional — to help develop your strategy.
Understand your current situation
Detail your current financial situation.
- Take an inventory of existing estate documents.
- Review beneficiary designations and asset titling.
Outline your goals
- Determine what’s important to you, such as:
- Transfer of assets to a spouse or beneficiaries
- Tax control
- Guardian for minor children or dependents
- Caring for a loved one with special needs
- Health care objectives in the event of incapacity
- Charitable intentions
- Business succession
Understand the trade-offs
Prioritize your goals (e.g., retirement versus legacy).
Discuss trade-offs between the amount of control you desire and the potential cost and complexity
Prepare for the unexpected
- It’s important to stay prepared for the things you can’t predict.
- Periodically review documents, titling, and beneficiary designations with the appropriate member of your professional team.
- Update your strategy when changes occur, such as tax/regulatory changes and/or life events for you and your beneficiaries (births, marriage, divorce, etc.).
- If you own a business, consider issues such as liability, business liquidity, and succession planning, if appropriate.
Meet regularly with your professional team and review:
- Your existing estate strategy and legal documents
- Life changes for you and your beneficiaries
- Investment allocation
- Beneficiary designations
- Changes in regulations and tax laws
Position your portfolio for both
- Decide whether your legacy or retirement goals have priority.
- With your financial advisor, determine appropriate asset allocation based on how you’ve prioritized your goals.
- Determine which investments make sense given your goals, including life insurance if you plan a specific dollar amount for your legacy.
- Consider the tax treatment of your investment accounts when developing your strategy, as the unique tax rules for different account types can affect the amounts beneficiaries receive.
- Review your investment strategy regularly, especially after life events or major changes in portfolio value, or if you make changes to your estate documents.
- Rebalance your portfolio in conjunction with withdrawals or gifting.
The Bottom Line
Estate planning is ultimately about protecting the people, priorities, and values that matter most to you. By taking stock of your current situation, clarifying your goals, and working closely with a trusted team of professionals, you can create a strategy that helps prepare for both expected milestones and unexpected changes. A thoughtful estate plan can provide greater confidence today while helping ensure your wishes are carried out tomorrow.
Edward Jones, its employees, and financial advisors are not estate planners and do not provide tax or legal advice. Please consult a qualified tax professional or an attorney for advice regarding your situation.
