Why estate planning is important

Having plans in place not only helps protect what matters most and supports an efficient wealth transfer, it will also ease the burden on your loved ones.

“Things will be very messy if one doesn't have an estate plan," Kiang says.

"What happens when there isn't a plan? It will be up to the family members left behind to pick up the pieces," Brennan explains. They will then try to piece together the deceased's financial affairs, which may be a difficult and traumatic time for the family.

One important thing to note is understanding the impact of taxes on assets controlled by an individual at death. A comprehensive estate plan generally aims to set up tax-efficient ways to transfer assets to beneficiaries. Without a plan, additional legal fees may be required to settle your estate.

How to set up an estate plan

Tthe initial step in the process involves accepting the fact that your estate needs to be sorted and a plan needs to be created.

That awareness is very important, You need to consider what a responsible estate plan looks like and why you need it. Having just a will might not solve everything.

Before deciding what makes sense for your estate plan and whom to pass it to, you'll need to know your specific assets and liabilities and where they are located.

As a start, an individual should compile a list of anything they own that's of financial value such as bank account deposits, property ownership, life insurance policies etc., 

This information, together with key persons of contact, should be saved securely with access to this information shared with only trusted individuals.

This list is going to provide the family with a base to work from, giving them an overview of the asset locations and an opportunity to check on any potential tax issues that may come into play if different jurisdictions are involved.

The elements of an estate plan

A common misconception of estate planning is that it is equivalent to drawing up a will. While a will is a good place to begin, it's only part of the bigger picture.

In addition to establishing a will, here are some key steps to consider when it comes to estate planning:

Preparing an inventory of your assets and liabilities.

1. Drafting a list of your estate-planning objectives.
2. Determining the actions needed to achieve your objectives.
3. Consulting with appropriate advisors to support and help implement components of your plan.
4. Conducting periodic reviews of your plan.
5. Designating your beneficiaries and the executors of your estate is also important. 

In addition,  it's vital that the executor you choose is capable of handling estate settlements and ensuring that your wishes are carried out after your death.

Transferring assets

There are a variety of approaches to transferring wealth; the choice will depend on your specific goals and circumstances. You'll want to consult qualified advisors to find the best methods for achieving your individual and family objectives.

Methods of asset transfer include:

1. Wills
2. Trusts
3. Single-name or joint-name structures
4. Private investment corporations
5. Outright gifts and inheritances

The will represents the most common means of estate asset transfer, but the use of the above methods may occur in conjunction with a valid will.

Estate plans should be tailored to the individual depending on the type of assets you have and the needs of your family.

For instance, if you own many asset classes, and have complex family dynamics, you'll need a more sophisticated and robust estate plan. Setting up a trust structure is a good option to consider and may provide more flexibility and benefits than what a will may offer.

Planning for incapacity

It's important that your estate plan also addresses the possibility of your becoming physically or mentally incapacitated.

An enduring power of attorney is a document that gives one or more persons the authority to manage your financial affairs if you lose mental capacity. Without this document in place, there may not be anyone with the legal authority to manage your financial affairs if you become unable to do so.

Handling the emotional aspects

Estate planning is not merely a financial process; it's also an emotional one. And many of life's experiences and events serve as reminders of the importance of planning for the future, from both a personal and a family perspective.

Communication plays a huge role in ensuring the success of intergenerational wealth transfer. Leaving your children to decide what's next after your death is a strain that can be avoided. As a responsible parent, the least you can do is protect your children after your life as well, Family input makes for a better estate. Have conversations with your loved ones before making key decisions about your executor, guardians for minor children and the assets you plan to leave to each person. A thorough and effective estate plan ensures the protection of you and your assets – it also provides peace of mind for you and your family, no matter what life may bring, an estate is everything you own or owe at the time of your death. And an estate plan is a written record that will help ensure an individual's assets and finances are properly managed, according to their wishes.

“The planning is a process of organizing one's estate, where the part about passing it on to somebody is very important,"