Your family can be a vital component of your estate planning. Opportunities exist that can make a meaningful difference in their lives, while you are still able to appreciate the impact you have made.
The estate planning process is often viewed in the context of the period after death. This is not surprising considering that the very term “estate”, focuses us on death. But instead, we could involve your beneficiaries while you are still alive.
Tossing money at your eventual beneficiaries can certainly endear you to them for a short time, but perhaps they are not very responsible with money. Do they really need that next big screen TV, or some other toy? Also, what if you need the money for yourself down the road?
The process being described does rely on some active involvement from all participants. If you and your family can not sit down to discuss your estate because of geographic or emotional reasons, then the process is not as effective. Ideally, if each member of the family met with the financial planner, the individual resources, objectives, problems and goals could be considered in the final estate planning process.
The focus is on trying to understand each person who will eventually be affected by the estate. The ultimate goal would be to try to look for ways that could minimize taxes while you are alive, benefit everyone, and then minimize taxes, probate and legal fees for your estate.
A simple example could be a grandparent who would like to help their grandchildren. By talking to all parties, a Registered Education Savings Plan might prove to be a good choice.
Another example might focus on adult children who really do not understand investing and saving. By involving them in the process, the opportunity exists to improve their knowledge, and make them more effective with their own resources.
Estate planning typically focuses on just your financial estate. By involving all the stakeholders, however, it can be an even more rewarding process, both financially and emotionally.