Estate planning is the process of accumulating, preserving and ultimately distributing one’s assets. There is a natural tendency to delay the estate planning process. An unwillingness to face mortality, procrastination, busy schedules, the lack of clarity and confidence, and everchanging tax laws all contribute to the delay.

Estate planning is a comprehensive term that includes, among others, financial planning, retirement planning, tax planning, asset protection, ownership structures, implementing documents (i.e., powers of attorney, healthcare directives, all types of trusts), long-term care and disability issues, and charitable planning. There are over 150 tools and techniques available to consider in planning an estate. The estate planning process is meant to empower and give one control over his or her financial affairs.

Understanding the concepts of estate planning is critical to achieve financial independence and to set aside a legacy to heirs. An estate consists of everything that a person owns (residence, bank accounts, 401(k) plan, business, partnerships, cars, etc.). Executing appropriate documents and implementing suitable tools/techniques are unselfish acts and a rewarding experience.

Estate planning, in my view, has four phases, which all build on each other:

Phase I begins by clarifying goals and objectives. This is the most important phase in the planning process in that it outlines motivations, values and objectives regarding an estate/wealth. A family mission statement is formulated that articulates specific objectives and goals. This document then becomes the guidepost for all subsequent planning. Our job is to work with the family to draft the family mission statement or family letter of intent. This document defines a legacy: Financial Independence - the amount of financial resources required to maintain a desired lifestyle; Family Legacy - a specific percentage of an estate or a fixed dollar amount to pass on to one’s heirs; Social Capital Legacy - the desired allocation to non-profits (charities), whether they include family foundations, charities of choice, or the Internal Revenue Service.

Phase II involves organizing an advisory team to assist in developing and designing an overall estate plan with specific steps to accomplish the objectives established in the family mission statement.

Phase III is the implementation process with each plan component correctly designed and executed. Services and expertise in this area include asset allocation consultation, risk management, life insurance planning and evaluation, asset protection, review of estate document drafts, charitable trust management and providing the education needed to reach a clear level of understanding of the tools and techniques utilized in the planning process.

This final phase includes ongoing evaluation and monitoring of the plan – a systematic approach to managing one’s affairs going forward.

The goal of an estate planning firm is to bring control, clarity, and confidence as well as a system of management as you accumulate, preserve, and ultimately distribute assets – otherwise known as estate planning. Confidentiality, trust, and creativity are the fundamental values that are offered as they assist in crystallizing your vision of the legacy you wish to leave for your loved ones.

This article is provided by Hostetler Church LLC through the efforts of Laureen M. Church, Director of Financial & Estate Planning. For more information go to Hostetler Church’s web site at www.hca-llc.com.