Waddell & Reed

Estate Planning*

Estate planning is essentially deciding how you want your assets distributed after your death. In other words, it’s about deciding, while you’re alive, how you want your assets to be used to help the people or the organizations that matter most to you.

Plan Ahead Now

Estate planning is an essential consideration for people of all ages – the earlier, the better. Too many people put it off — sometimes until it’s too late. The time to begin developing your estate plan is now, otherwise your estate, your assets and your personal wishes could potentially fall into the hands of your state government.

Here are five important steps to consider as you begin to address estate planning issues:

  1. Build your team.

    It’s important to have qualified legal, tax and financial advisors who can provide you the counsel you need to carry out your wishes properly. You can get boilerplate will and trust forms, but if there’s a problem with these or your plan, you may not find out until it’s too late. It may cost your heirs far more to resolve the problem than it would have cost you to use qualified legal, tax and financial advisors in the first place.

  2. Make a list of assets.

    Create a list of what assets you have and make a note of specific assets that you want to designate to certain people or organizations.

  3. Designate beneficiaries.

    Who do you want to receive your assets? Who do you want to help, both now and when you’re gone? Some people start estate planning by talking about taxes. While taxes are critical to estate planning, most people are more concerned with getting the right assets to the right heirs at the right time, than about how much their estate will owe in taxes.

  4. Decide a minimum or maximum pay out.

    Now that you have your list of assets and beneficiaries, it’s time to establish reasonable amounts for inheritances. This is where you decide what your loved ones or your favorite charities should receive as a minimum amount, or, in some cases, a maximum amount is noted. There are four ways to transfer assets legally to your heirs after your death: direct transfer, joint ownership, trusts and probate.

  5. Make a will.

    The first step in probate is to find out whether a valid will exists. If there isn’t one, state law will settle who gets what. The courts call this the law of intestate succession. It means the state devises a plan for you if you don’t set up your own plan.

You need a will if you: wish to name your executor, want to control the terms under which the assets in your estate are distributed, want to specify the guardianship of any minor children and wish to take advantage of estate tax-saving strategies.

* The tax information in this section of the website is for informational purposes only. It is not intended, and should not be construed, as a recommendation, or legal, tax, or investment advice or used for the purpose of avoiding U.S. tax-related penalties. You should consult your tax advisor to answer questions about your specific situation or needs.

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