Although we can’t control when that will happen, we can determine where our possessions will go. With a well-thought-out and efficient estate plan, you can ensure your beneficiaries receive their share of your assets without confusion or conflict.
The process of estate planning can be complicated, emotional, and multifaceted. Our guide provides eight steps to help you start the process, explains the basics of estate planning, identifies who needs it, and shows you how to complete your estate plan.
Estate planning is the process of establishing instructions for managing and distributing your assets and wealth after your death. The primary objective of estate planning is to carry out your final wishes, provide for your loved ones, and efficiently distribute your assets in a tax-efficient manner. You can also use the plan to protect your assets in the event of serious illness.
Effective estate planning relies on documentation and strategy. The primary components include wills, trusts, powers of attorney, and transfer of property ownership. The average costs associated with estate planning are as follows:
Estate planning used to be a financial tool created primarily for the wealthy, but in recent years it has become a popular resource for anyone seeking peace of mind by preparing for the future. Probate issues—delays and debates over the distribution of assets after someone's death—are common among survivors. However, a well-constructed estate plan can save your beneficiaries from misunderstandings after your death.
Now that you’re familiar with the basics of estate planning, let’s explore the process of creating a plan. This step-by-step guide will aid you in your journey of establishing your own estate plan.
1. Inventory your assets
Assigning a monetary value to your possessions is important for many reasons, primarily for establishing your net worth (total assets minus total liabilities). For accuracy, you should list your tangible assets, such as your home, vehicles, gold bars, jewelry, artwork, and other valuables. Then, list your intangible assets, such as stocks, life insurance policies, savings accounts, and business ownership.
2. Factor in estate taxes
Often referred to as inheritance (or death) taxes, the government typically imposes estate taxes on the total value of your estate upon your death. You should research which tax laws apply to your estate. For example, at the federal level you should know whether your estate value is below the personal federal estate tax exemption threshold. For 2023, the personal federal estate tax exemption threshold is $12.92 million. An East West Bank estate planning professional can help you plan for and navigate that.
3. Provide for your family or survivors
Now that you know your asset values, it's time to write your will and detail how you want your assets distributed. It's also a good idea to have a life insurance policy, especially if you have children and carry debt balances, such as a mortgage.
4. Establish a trust
By transferring your assets to a revocable living trust, you can select a trustee to manage your assets to benefit you and your heirs. If you become too ill to handle your affairs, for example, the trustee can oversee your assets. When you pass away, your designated beneficiaries will receive your assets and avoid the hassle of probate court.
5. Create your healthcare directives
Your living will should provide details concerning your medical care wishes if you become incapacitated. For example, you should state whether you consent to being put on life support.
6. Grant financial power of attorney
Power of attorney is a written document that designates another person to perform duties under the guidance and supervision of its grantor. However, should the grantor become incapacitated, then the general power of attorney ceases its effectiveness and a durable power of attorney is instead required to control your financial affairs if a medical condition prevents you from doing so. In your absence this person or agent can act in your place for financial and legal matters.
8. Consider getting help from an investment services professional
Estate planning can be complex and stressful. East West Bank’s experienced financial consultants are a reliable and supportive resource to help you plan your estate. You should also consult an estate planning attorney or a tax advisor for any legal and tax-related issues.
At East West Bank, we hope you have a long, happy life surrounded by family and friends. Our goal is to help you ensure your assets continue to enrich their lives after you are gone. Our investment service professionals will take the uncertainties out of the process and help you create the best plan to safeguard your estate. Learn more about our estate planning services today.
East West Wealth Management is a marketing name of Cetera Investment Services.
Securities and insurance products are offered through and advisors are registered with Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC.
Advisory services offered through Cetera Investment Advisers LLC. Both firms are under separate ownership from East West Bank and its affiliates. East West Bank will not provide or be responsible for any tax or advisory services and/or legal information services given at the seminar.
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