Estate planning refers to all the preparation that goes into the division of assets after death. While one of the most important parts of estate planning is writing a will, there is much more to it than that. To ensure assets are transferred according to plan, the testator should consider every possible aspect before death. This includes itemising and valuing assets, making plans to transfer them to beneficiaries, and doing everything possible to ensure those transfers can be coordinated smoothly.

Dr Edgar Paltzer is an attorney-at-law who lists estate planning as one of his preferred areas of practice. You can discover some of the reasons why it can be useful to hire a specialist estate planning attorney in the PDF attachment to this post.

Estate planning also consists of ensuring all the relevant legal documents are valid and in place prior to death and stored where the relevant people can access them.

Estate Planning Documents

The key document required for estate planning is a valid, witnessed last will and testament that will stand up and pass review in probate court. This document details who the legal recipients of all assets will be, as well as specifying other important decisions such as who will care for any dependants and who will be the executor. The role of the executor is outlined in the embedded short video.

The families of any individual who dies intestate, which means without a valid will in place, will have to rely on the joint decision of the statutory heirs or, if they cannot agree, a court judge as to where and how assets should be divided. Other important documents in estate planning include a mandate in case of incapacity, which appoints a named individual to take care of business should the person making the plan become incapacitated or in any way incapable of making their own decisions.

Identifying and Valuing Assets

Before any portfolio of assets can be divided, each individual asset needs to be identified and recorded, along with valuations of each asset or group of assets. The easiest group of these are physical assets, such as property and possessions including any jewellery, electrical items, antiques, vehicles, valuable artwork and other collectibles. There are also non-physical financial assets to consider, which might include investments, stocks, shares, bonds, insurance policies, and cash in savings accounts.

The main categories of assets that can be included in a will can be seen in the infographic attachment.

Listing Debts

Debts also need to be accounted for in an estate plan as they will have to be repaid prior to any of the assets going to the designated recipients. This includes mortgages on properties, vehicle loans, personal loans, credit cards, store credit, and any other form of credit. It is good practice to detail these, including all relevant account numbers, payment schedules, contact details and penalties for early repayment on a regular basis, so the executor can deal with them promptly and in the most financially efficient way possible.

Naming Beneficiaries

One of the most important factors that goes into writing a will is that it creates the opportunity for beneficiaries to be named legally for each asset to be passed on. People who die intestate run the risk of disputes among the statutory heirs as to who should be the recipient of assets or assets going to persons that they may not wish to benefit, or of certain loved ones missing out on gaining anything.

It is essential to remember that certain assets will not be passed on through the will, but through their own specific documentation. These might include insurance policies or retirement accounts that have named beneficiaries.