Financial professionals

Four estate planning steps

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If you’re like most people, you’ll work your entire lifetime to accumulate assets: a home, cars, savings, real estate, investments, etc.

The comparatively small amount of time and money required to create an estate plan will help ensure that your assets are passed on with the best possible tax consequences to your beneficiaries.

A good estate plan will:

  • Ensure that your wealth reaches the individuals or organizations you select, in the manner that you choose
  • Help to minimize the effect of federal and state taxes
  • Help to ensure settlement costs are paid without jeopardizing your family’s inheritance

Here are four basic estate planning steps.

Take an inventory of your assets

Your inventory should include your home, jewelry, stocks and bonds, bank accounts, insurance policies, retirement plans, and other property. Note how they are owned. Next, take a similar inventory of your debts and liabilities.

This estate planning workbook can help you track your assets.

Determine your estate goals

For example, do you want all your assets to go to your family? Do you want any assets to go to charity? Do any of your children have special educational, medical, or financial needs?

Your goals can also be documented on the estate planning tool. More importantly, the final wishes need to be included in your will or trust. An estate planning attorney can guide you through this process and draft important documents.

Develop an organized plan for the payment of taxes and expenses

The payment of state and federal taxes cannot always be avoided. There are options for meeting tax liabilities:

  • Use existing liquid assets.
  • Sell estate assets which could result in the assets being sold at a loss due to forced sale conditions.
  • Life insurance is often the most cost-effective solution as it is generally income tax-free and can be used to pay taxes and estate settlement costs, thus protecting the value of your estate.

Review your plan

At a minimum, your estate plan should be reviewed every three to five years or any time your life or circumstances change dramatically. If you encounter any of the following changes, they can alter your estate plan significantly:

  • Marital status
  • Ownership or value of property
  • Birth of a child or grandchild
  • Tax laws
  • Income or employment status
  • Business ownership
  • Relocation

Periodically reviewing any wills and trusts will help to ensure that your plan still accomplishes your goals in a tax-efficient manner.

Now is the time to plan

There is little that can be done after death to create a plan. By working with your financial professional now, you can enjoy the peace of mind knowing that a plan is in place to help preserve your estate for your beneficiaries.

This material provides general information that is designed to be educational in nature and is not intended as specific tax or legal advice to any particular individual nor the law of any particular state. Please seek the advice of a qualified tax or legal professional for your specific situation.

Products are issued by AuguStar Life Insurance Company and AuguStar Life Assurance Corporation. Product, product features and rider availability vary by state. Issuer not licensed to conduct business in NY. 

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