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Eating the Estate Planning Elephant… One Bite at a Time, Part I

No one wants to look at it, no one even wants to think about it, yet there it looms —...

No one wants to look at it, no one even wants to think about it, yet there it looms — the giant estate planning elephant in the room. It’s impossible to coexist happily, so you know you’ll have to tackle the beast at some point, and when it comes to your financial well-being, earlier is always better than later.

So what’s holding you back? Many Americans mistakenly believe estate plans are only for millionaires, but many more are simply threatened by the perceived scope and difficulty of such a goal.

Spend a weekend doing a household walkthrough as well as a walkabout of any property beyond the walls of your home, ticking off and logging assets as you go.


Estate planning is a serious endeavor, so it’s not uncommon for people to use their perception of estate planning as a long, difficult, tedious and time-consuming process as an excuse to procrastinate. But there’s no need to stall along the path to reaching your estate planning goals, especially if you break the process down into simple, easy-to-manage tasks. And after all, isn’t that the best way to eat an elephant? Take it one bite at a time, and before you know it, you’ll have a solid estate plan in place — not to mention the peace of mind that comes along with it.

You can begin your estate planning by taking these four simple bites into the process. Of course, if you’d like some guidance as you navigate the estate planning landscape, not to mention the confidence that comes from knowing you’re doing all the right things, enlist the help of a professional financial advisor to keep your “appetite” on-course — preferably one who specializes in estate and retirement planning. In addition to expert advice, your advisor may also be able to offer a customized evaluation of your needs, as well as assist in providing and filing any necessary documentation.

Conduct an Inventory of all Your Physical Possessions

First things first: Before you can plan for the distribution of any of your possessions, you must know precisely what you have. Begin creating a master list of everything you own that’s worth $100 or more, and don’t forget to include any items that may be outside your home. Create a simple, three- or four-column spreadsheet on your laptop or tablet (the more portable, the better), and begin recording everything in your possession valued in the triple digits. Use the first column to log each possession and the quantity; in the second column, enter an approximate value for the item; and devote the third column to a brief description. If you already have an idea of who’s getting what after your death, add a fourth column to type in the name of the intended recipient.

Your master list should include possessions such as jewelry, art, collectibles and antiques, appliances and electronics, decorative pieces, china, silver and crystal, furniture and furnishings, vehicles, recreational toys like jet skis and ATVs, patio furniture and decorations, power tools, your kids’ big-ticket toys, and even your home itself. The point of this exhaustive listing is that your master list must be, well, nothing short of exhaustive.

Give yourself a deadline to complete this task. Spend a weekend doing a household walkthrough as well as a walkabout of any property beyond the walls of your home, ticking off and logging assets as you go. The rest of your master list can be completed whenever you have a few minutes of downtime. It shouldn’t take more than a month for you to find enough time to complete your inventory of possessions.

Perform an Inventory of Your Intangible Assets and Possessions

While you’re in the list-making mood, the next bite you can take into the process is to create an equally exhaustive inventory of your non-physical products, investments or assets. Start by tracking down any documentation demonstrating proof of ownership of an item, or anything that makes a payment upon your death. Your list could include anything from checking and savings accounts, 401(k) plans, life insurance policies, annuities and brokerage accounts to health insurance, auto insurance, long-term care and homeowners insurance. You should also notate the value or payout of each asset on this list.

Get an Annuity and Life Insurance Checkup

Since life insurance and annuities are both assets that will pass on to your beneficiaries when you die, it’s a good idea to ask your agent or advisor to review your policies. Be sure to alert him or her of any changes in beneficiaries, especially if you’ve experienced a recent life change, such as a marriage, divorce, birth of a child, or even the death of a loved one. Make an effort to keep your beneficiaries current to avoid any inconsistencies after you pass away. It’s also good practice to contact the carriers  of your policies to ensure they have all the correct information regarding how you’d like your assets to be divided among your beneficiaries.

Determine All of Your Debt

Just as you took stock of all the assets you own, you must do the same for anything you might owe. Begin creating a comprehensive list of all your payments and debts. Your list might include things such as the mortgage, home equity lines of credit, vehicle loans, student loans, and every credit card held in your name, even the ones with a zero balance. Investopedia has a great tip for simplifying this process: By law, you get one free credit report from all three of the major reporting agencies each year, so order your report from Experian, TransUnion and Equifax and review them carefully — remember to look for any inconsistencies. In addition to learning your credit score, these reports come in handy when determining what you owe and to whom. They can also reveal possible identity or credit card theft, or simply identify open accounts that you may have long forgotten about, but which should be closed due to a lack of activity.

In Part II of this article series, we’ll discuss four more bites you can take out of that pesky elephant on the way to fulfilling your ultimate goal of developing a solid estate plan.


DISCLOSURE: Investment advisory services are offered through Gretchen Stangier, Inc. DBA Stangier Wealth Management (“Stangier Wealth Management”), an investment advisor registered with the U.S. Securities and Exchange Commission. Stangier Wealth Management only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided copies of the firm’s ADV Part 2A brochure and Part 3 documents.

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Photo courtesy of: http://www.stage2planning.com

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