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An Overview of Estate Planning

Often people’s eyes glaze over when they hear the phrase “estate planning.” We put aside planning for our future because we convince ourselves we don’t need it: maybe we’re young, maybe we don’t have a lot of assets, and anyway, didn’t we already do it years ago? The truth is that estate planning is difficult because it’s fundamentally about planning for your own incapacity and death. Although there are certain special cases where you may be able to see and appreciate the outcome of these plans, the point is to prepare now to make things easier for yourself and your loved ones later.

Decisions, Decisions

Estate planning addresses two primary concerns. The first is, “Who will make decisions on my behalf when I can’t?” People commonly interpret this to mean after death, but proper estate planning is not just about what happens after you die. It also accounts for what happens if you lose the capacity to make sound decisions. For people who are married, their spouse is often an obvious choice to make decisions for them. You might not be married, though, or your spouse might die or lose capacity before you do. Having a clear line of succession, ideally including multiple people, ensures that someone you trust will continue to make decisions on your behalf that support your values, intentions, and goals.

Who Gets What?

The second concern of estate planning is probably the one most strongly associated with the process: “What do I want to do with my assets?” This is a very personal decision, and there isn’t always a clear answer. Sometimes it can be as simple as leaving everything equally to your children. Other times it’s more complex. One child might really need the money and another doesn’t. Maybe you own real estate and your children are unable to agree on whether to sell it. Maybe you don’t have children, or you want to support community organizations that are important to you. Everyone has their own set of priorities and values that inform how they think about their legacy. In our experience, different people approach these same situations in very different ways, and what works for one person is not necessarily right for another.

Expect to Make Changes in the Future

Things often change without our realizing it – in our lives, in the world, in the law – that warrant an update to the estate plan. For that reason, it’s important to revisit the documents from time to time, because what’s in place right now might not reflect how your life has evolved over time. Our work with clients can span the entire estate planning process, from articulating a vision to actually signing and putting into effect completed documents. Though it’s different for everyone, the few scenarios posed above are a small taste of what this process can be like. Regardless of how complicated the situation is, having a clear vision is a useful precursor to translating that vision into clear legal documents with an attorney.

In future articles, we’ll explore specific aspects of estate planning in more depth.

Sam Wood-Bednarz, CFP

About Sam Wood-Bednarz, CFP®

Sam Wood-Bednarz is a lead advisor with North Berkeley Wealth Management and serves as Director of Financial Planning.

Read more about Sam

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This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

By |2021-06-03T10:46:26-07:00September 24th, 2020|