If you have begun, or are considering beginning, the estate planning process, there are some simple rules you can use to help keep you focused. When people begin estate planning they often do so from a position of having little to no experience with the process or the tools involved. Estate planning can be complicated, and it can be easy for inexperienced people to get overwhelmed by all the details and new information. If you find yourself feeling overwhelmed, allow yourself to take a step back and focus on the bigger picture. Remind yourself of the following rules so that you can stay on track.
Estate Planning Rule 1. Values are more important than control.
Some people who create an estate plan try to use their plans to control what happens after they die. For example, creating trusts or inheritance devices that place a lot of limits on the gifts you give is something that appeals to some people. But going into the process with this goal in mind is often counterproductive. Instead, it can be much better to start by looking at the broader ideas of values and legacy. How will you be remembered after you are gone? What will future generations think of you? Will they be able to look at you as an example of how to live a meaningful life? Deciding what values are important to you and making choices on how best to be remembered can often make the estate planning process much easier.
Estate Planning Rule 2. Simple is often better than complex.
There are a wide range of estate planning options available to people today, but most people don’t need to use the most complicated tools. Simple and effective estate plans are often the best because the people who create them are able to use and understand them much more easily. You will be more comfortable with your plan if you understand how and why it works. When you use more complicated devices, you often limit your ability, and your motivation, to get the most from your plan.
Estate Planning Rule 3. Change is not only inevitable, it’s also necessary.
There are few parts of your estate plan that will never change. As your life changes, as your decisions change, and as the laws change, so too must your plan change. You’re not done with the estate planning process after you create the appropriate tools. You must be prepared to modify and update those tools as necessary in the years to come. A good plan is one that meets your current needs, regardless of whether those needs are the same as they were when you first created the plan.