Terry Balding & Associates - Executive

Estate Planning

What is an estate plan?
Why have an estate plan?
What is involved in an estate plan?
How can I start building my plan?
How is an estate settled?
What else do I need to know?
Fees for Estate Planning 

Estate Planning Questionnaire
Estate Planning Checklist



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If you thought that estate planning was only for the very rich, get ready for a surprise. It may be even more important for those with modest income to plan carefully, to conserve the maximum value of their assets for distribution to their chosen heirs.

What is an estate plan? 
An estate plan is a coordinated strategy for conserving the assets you accumulate during your lifetime, distributing them according to your wishes at the time of your death, and providing for any needed funding to meet family needs and provide estate liquidity. 

In addition, an estate plan outlines who will manage the settlement of your estate, and who will care for and manage the affairs of any minor children. It can also take into consideration special circumstances, such as care for aged or infirm parents, a disabled child, or gifts to a favorite charity.

Why have an estate plan? 
An estate plan will help you reach the goal of leaving the maximum amount of property to whomever you wish by minimizing legal complications, tax obligations, and settlement costs.

In the absence of a formal document specifying your wishes, the laws of the state in which you live will determine not only how your assets will be distributed, but will control such decisions as the guardianship of your children as well. Ultimately, the court’s decisions may be radically different from your own.

What is involved in an estate plan? 
Your estate plan should be designed to protect your assets now, and ease the process of transferring them to your loved ones after your death. 

A good place to begin is to collect the documents and information your survivors will need to settle your affairs, and put them in a safe place where they can be easily retrieved. These can include your will and/or trust documents, birth and marriage certificates, an inventory of your assets, information on insurance policies, bank and investment accounts, and more.

Next, you need to decide how you wish to distribute your assets. Your objectives, the size of your estate, and state and federal tax laws are major factors that affect your plan. Because each decision you make may have a variety of legal and tax implications, and because tax laws are complicated and change often, an objective financial advisor with estate planning expertise can be invaluable.

How can I start building my plan? 
The structure of your estate plan can use many tools, including contracts (such as life insurance), titling strategies (such as joint ownership of real estate), wills and trusts.

Contracts and titling strategies can allow your assets to pass automatically to the person you choose. For example, proceeds from life insurance policies and retirement plans can be transferred through a beneficiary designation; real estate holdings and bank accounts can be transferred by including your heir as a joint owner on the title or account.

Wills and trusts are another method of specifying who should benefit from your estate. These documents should be prepared with the help of an attorney, who can ensure your plans adhere to the laws of your state.

Your will allows you to specify who should manage the settlement of your estate, as well as the exact distribution of your assets. It can also help minimize costs to your survivors, since carrying out a well-prepared will is less costly than having a court administer your estate.

A trust allows you to transfer some or all of your assets to a third party (the trustee), who holds and manages them for the benefit of the person you choose to receive them (the beneficiary).

You can set up a trust to accomplish any specific objective you desire. Some examples include providing a regular income to a spouse, specifying care for a child with special needs, managing assets for minors until they reach a certain age, and even paying for a beneficiary’s education as long as a certain grade point average is maintained. 

Potential tax savings are another reason why trusts are often used in estate planning.

How is an estate settled? 
Any assets in your estate that are not transferred automatically or under a qualified trust agreement will become "probate assets," to be distributed under court supervision. The probate court oversees the valuation of these assets, and pays your creditors and any taxes out of the proceeds of your estate. The probate process is designed to protect your interests. However, it can be lengthy and complex, tying up your assets and delaying distribution to those you wish to have them. This is the primary reason that most experts recommend estate plan strategies to avoid the probate process.

The costs to settle your estate generally fall into three categories: 1) administration and probate costs, including attorney’s fees; 2) federal estate tax; and 3) state inheritance or estate tax. A good estate plan is designed to minimize the impact of all of these factors.

Take federal taxes, for example. The unlimited marital deduction rule allows your spouse to receive your assets outright or through a qualified trust without being subject to any federal estate taxes. A strategy of leaving everything to your spouse, however, may create estate tax problems for your children or other heirs at your spouse’s death. Coordinating the estate plans for both you and your spouse can help protect the maximum amount of your assets.

What else do I need to know? 
Your estate plan should always reflect the changes that occur in both the law and your personal life. A periodic review will assure that your assets and your heirs are adequately protected.

Now is the time to start building your estate plan to protect yourself and your loved ones. If you would like professional answers to your questions, contact Terry Balding at (608) 837-9099 or tabalding@hirep.net.

Fees for Services 
Terry Balding & Associates hourly rate for estate planning is $125.00.