In her guidebook, Marjorie J. Stephens, a Dallas lawyer specializing in the estate and probate matters, suggests individuals follow the tenets of Stephen Covey’s Seven Habits of Highly Effective People when creating an estate plan. Ms. Stephens stresses the first three habits to get started.
Habit No. 1: Be Proactive
Being proactive means not waiting until one has turned sixty or death is imminent to create a plan. The best plans are established first in early adulthood and revised every five years and after a major life event.
A prudent planner considers the following: (1) the goals to be achieved; (2) the legacy to be left; and (3) the steps necessary to get there.
Habit No. 2: Begin with the End in Mind
Critical to the effective process is setting objectives. If one objective is to leave assets to children or others, determine how much transfer of wealth is desired. That decision should be informed by what are the anticipated needs of the individuals to be benefited.
For instance, Jane, who is in her late forties knows that her adult son employed in a low-paying nonprofit position, is likely going to need financial help sending his triplets to college. On the other hand, Tom, whose entrepreneurial daughter had already earned her first million before she was thirty, will not need his help. He might want to indulge his passion for Carolina Dogs by leaving a substantial portion of his estate to a rescue society that focuses on that breed.
Habit No. 3: First Things First
Covey stresses setting priorities. Stephens recommends imagining one’s funeral and what will be said about you and visualizing the impact of your decisions on a surviving spouse and children.
A comprehensive plan does more than prepare a will and/or a trust. It is refined by a purpose statement revealing what you hoped to accomplish through your planning that can be communicated in the will, a letter to your executor or to the family, a video-taped message, or any other communication vehicle appropriate for your purposes.
Take Necessary Steps to Implement Plan
Whatever the objectives, the steps necessary to achieve them must be done in a timely manner. For example, if Jane realizes she can’t save the amount of money her son will need, she can consider obtaining a life insurance policy to supplement the assets in her estate. If she does this now, her premiums will likely be affordable; whereas for every year she postpones that purchase, they become less so.
Sandra W. Reed practices Elder Law in Somervell County, handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning. She lives in beautiful Chalk Mountain. She can be reached at 254.797.0211; 817.946.2809 or by at email@example.com.