How to Manage Your Estate Planning

Proper estate planning is essential in order to ensure that your affairs are handled and your assets are distributed according to your wishes. Failing plan for your estate can have devastating consequences for your surviving heirs. Even a simple will can alleviate a lot of problems, but, depending on the size and composition of your estate, there may be several aspects of your plan that needs to be managed in order to ensure it complies with your intentions as well as the law.

This is not to say that estate planning has to be complicated, nor does it say that estate planning is only for the wealthy. Anyone with assets such as a home, a savings account, a business and the need to preserve the estate for the benefit of surviving heirs needs to manage their estate affairs. For most estates there are a few straightforward arrangements that can be made with minimal expense. An attorney may need to be consulted if the estate is of the size that attracts Uncle Sam’s attention for tax purposes, or if there are complicated arrangements involving family members.

To effectively manage your estate planning there are four areas that should be addressed: 1) Transferring your assets; 2) Minimizing your estate costs; 3)Taking care of love ones; and 4) Managing your affairs when you no longer can.

Transferring Your Assets

The first consideration for managing your estate plan is to ensure that your assets are passed on quickly to your heirs with minimal entanglement with the court. There are several tools at your disposal with which to accomplish this.


A will is a legal document that communicates your intentions for asset distribution, guardianship of minors, and who is to execute your will. Upon your death, your will becomes a part of probate proceedings wherein a court will consider it along with anyone who can demonstrate that they have a financial interest in your estate. The probate proceeding is not closed until the court answers all claims, which may or may not be valid. Once proceedings are closed, the executor can distribute the assets. This can be a slow process, but at least it does ensure that your wishes will be carried out.


Instead of, or in addition to a will, you can establish a trust, name a trustee, and then have your assets transferred to the trust. The trustee will manage the assets for the benefit of the trust’s beneficiaries. The main reason this is done is to prevent the assets from being subject to probate proceedings allowing them to pass directly to the beneficiaries. Trust arrangements can also be made to minimize the estate’s exposure to taxation.

Minimizing Your Transfer Costs

The settlement of any estate typically incurs certain expenses including probate fees, legal costs, and state or federal taxes. Properly planned and managed, an estate can be arranged to minimize many of these costs.

Avoiding Probate

By creating a trust, assets can be transferred to the trust and beneficiaries designated who will receive the asset directly from the trust thus avoiding probate. The simplest and less costly trust to use for this is a living trust. Also, any asset that transfers by contract, such as annuities rates, life insurance, qualified plans will pass directly to the named beneficiaries.

Avoiding Estate Taxes

There are a number of techniques and arrangements that can be applied which can help reduce your assets exposure to taxation.

Marital Deduction – Each spouse can gift an unlimited amount of their portion of the estate to each other

Lifetime Gifts- By making qualified lifetime gifts of up to $13,000 to family members each year, these assets will be excludable from the estate

Charitable Gifts – Gifts of assets made to charity during your lifetime or from the estate are also excludable from the estate.

Credit Shelter Trust – Each spouse is given a “credit” in their half of the estate of $1,455,800 (currently). The trust is designed to ensure that this credit is fully utilized thereby making the full amount of the surviving spouse’s credit available to him or her.

Taking Care of Loved Ones

A critical aspect of managing your estate plan is to ensure that your loved ones will have the financial security they need.

Life Insurance Plan – Life insurance is vital to the estate plan to provide the liquidity your surviving family needs. Estate settlement costs should be considered along with the family’s capital needs when determining the amount of life insurance coverage.

Guardianship – Arrangements must be made for minors and family members with special needs. Guardianship arrangements should be reviewed regularly to update based on changing family circumstances.

Professional Management – If the estate includes investments such as stock portfolios or income properties, it may require a professional manager to maintain them for the benefit of the family.

Taking Care of You When You No Longer Can

The changing reality of medical advances that result in living through critical illness and other forms of incapacitation has created a whole new level of planning needs without which could result in devastating financial consequences for the family. The only time to manage this critical aspect of your estate plan is when you are young and healthy.

Long-Term Care – The costs of long-term care, either through nursing homes or home care, are constantly rising and, if needed, could wreak havoc on the family and the finances. Long-term care insurance, purchased at a young age can be the most cost effective way to cover these costs.

Living Will – A living will directs medical decisions when you no longer can. Any desire to maintain or withhold medical care at a critical decision point is communicated through this directive.

Durable Power of Attorney – This is legal document that authorizes a person or persons to make key financial and medical decisions should you become incapacitated.


Managing an estate plan is not just about making final financial and medical arrangements. Because your financial and family situations are constantly involving, it is a lifelong process that incorporates changing circumstances, preferences, and desires. Keeping your estate plan current is just as vital as managing your current financial plan. Working with a qualified estate planning specialist can save your estate a lot of money and your family a lot of extra grief.