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Financial Answer Center

Understanding the Basics

Steps You Should Take in Planning Your Estate

Following are the basic steps you should undertake in planning your estate:

  • Talk to your partner about your wishes for your assets and family upon your death, and the process to be undertaken. Commit to this process as a joint effort.
  • Estimate the value of your estate. Each person should do this separately.
  • Identify a guardian for minor children and name alternates.
  • Identify executors (with alternates) for your estate.
  • Make a list of people who will depend on you after your death and determine how much they will need to live on. Make sure your plan adequately provides for them.
  • Decide how to give away your assets when (a) you and your spouse die together, and also (b) one survives. Name alternate beneficiaries in case the people you select die before you. See the "Estate Wishes" worksheet.
  • Determine which assets are held in joint names, have beneficiaries, or are community property, as the form of property ownership can override the will.
  • Decide if you want to make gifts to people while you are still alive. Can you afford to part with these assets?
  • Figure out which assets will be tied up in a probate hearing. Does your family have enough to live off of while the courts review your estate?
  • If there are children from a prior marriage, keep this in mind when determining to whom to leave your property.
  • Review the people you designated to inherit money and property when you die. Would any of these people have trouble managing their inheritances? Consider trust alternatives if there is a concern here.
  • Find an attorney to help draft a will, trusts, and other important legal documents. Both you and your partner should have a separate will.
  • Make certain that, if appropriate, assets going to children are protected in trust, especially if minor children will be inheriting property.
  • There are special considerations if your spouse is not a citizen of the United States. You'll need to find an attorney who is knowledgeable in this area of estate planning.


Additional Steps to Undertake if the Value of Your Estate is over $11.58 million in 2020

        Following are additional steps if the value of your estate is over the applicable exclusion amount $11.58 million in 2020 and $11.4 million in 2019

  • If your estate is very large, contact an estate planning specialist to get information on more sophisticated planning techniques.
  • Consider leaving part of the inheritance to your spouse in a QTIP trust (Qualified Terminable Interest Property Trust) if you are not sure whether he or she will be able to manage the assets after your death (or you are concerned about who will get those assets upon your spouse's death).
  • Make sure that each estate has enough assets to take advantage of the applicable credit amount of each spouse. Before you split assets, make sure that you feel comfortable having your spouse own assets outright.
  • Estates of decedents survived by a spouse may elect to pass any of the decedent's unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse. See the instructions to Form 706 for additional information.
  • Consider giving gifts, but don't give away assets unless all your financial needs are taken care of during your lifetime.
  • Evaluate the benefit of shifting life insurance out of your estate and into an irrevocable life insurance trust to reduce the value of your estate; properly structured, the life insurance proceeds would be excluded from your taxable estate.

Consider placing out-of-state real estate into a trust to simplify probate and potentially minimize state estate tax.

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Securities and insurance products are offered through Osaic Institutions, INC., Member FINRA/SIPC. Osaic Institutions, INC. and FB Wealth Management, a division of First Bank, are not affiliated. We do not provide tax advice. Consult your tax advisor. NOT Bank Deposits NOT FDIC-Insured HAVE NO Bank Guarantee NOT Insured by any Federal Government Agency May Go Down in Value