The term “estate planning” has a tendency to send many people in a panic -too complex, full of legal lingo and complicated tax concepts. In his article Estate Planning Without Anxiety Peter Keating with SmartMoney Magazine does a good job of explaining the basic concepts. There are four simple steps you should be aware of when working on your estate plan:
- Know what you have and decide what you want to do with it. This is the very first step in any estate plan. Take inventory, and be sure to include your personal property, retirement accounts, life insurance policies, etc.
- Understand the tax consequences. Tax laws are always changing and it is important to understand how taxes may impact your estate plan.
- Choose the correct vehicle to accomplish your goals. While a simple will may work well for those with limited assets or those who desire a simple distribution, people with more complex estates would benefit from some sort of trust. Mr. Keating does a good job explaining the most common trusts used in estate plans.