INSIGHT on Estate Planning
A quarterly newsletter on estate planning and planned charitable giving, provided as a service by the Planned Giving Program of the National Academies
Putting Your Values at the Center of Your Estate Plan
Estate planning is not something to be rushed.
But it's not uncommon for busy and accomplished people to wait too long to begin the process, then feel rushed to complete it. Or worse, they pressure themselves into viewing it as an insurmountable and unpleasant task, and never get around to it--to the great benefit of the IRS, and the detriment of their family and of their favorite charitable institutions.
Nor is estate planning something to do in cookie-cutter fashion and without forethought.
Many people think that their first step must be to consult immediately an investment professional or a tax attorney who will create a complex program geared to tax savings based on specific vehicles. Thus, they find themselves with a "tailor made" estate plan that may have little relationship to their real, long term goals. This is much like buying an airplane ticket before you know your destination: you're going to get somewhere, but not necessarily where you really want to be.
So if you have not developed your estate plan yet, now is the time for you to begin planning. But don't "just do it."
Approach your planning in a reflective and effective way that builds a strategy based on your personal values and goals. Then find a specialist who can help you implement your strategy.
This more deliberative approach to estate planning is known as "Values Centered Estate Planning."
"Values Centered Estate Planning puts all of your resources--your assets and ideas--behind your most fundamental beliefs about the good of your loved ones and society," explains Mark Weinberg, an estate planning attorney who represents charities and donors in planned giving, and serves as planned giving counsel to the National Academies.
Seven Essential Steps
The Values Centered approach to estate planning is a seven-step process, with each step building on the previous one. This issue of Insight will introduce the first four steps; the next issue will cover steps 5 through 7.
Step #1: Inventory Your Assets and Make a Quick, Conservative Valuation
Starting out is simple: just tally some numbers. The calculation need not be exact and detailed; rough them out on the back of a napkin at the dinner table. Figure a broad estimate of the assets belonging to you and your spouse, including stocks, bonds, mutual funds, and other securities; retirement funds; life insurance; primary and summer homes, and other valuable property.
The goal here is just to set the stage for the thinking involved in Step 2--you'll do a more detailed analysis of your assets later in the estate planning process.
Step #2: Answer Two Tough Questions
The most difficult part of the process may be answering two questions that involve soul searching about your own values:
* How much money and property do you want to leave and to whom, beyond your spouse?
* What do you want to accomplish with the rest of your assets?
Take time to think carefully about the first question, as your estate plan will be built on this decision. Your answer should be as specific as possible--how much money and property and to whom. Developing these answers may be difficult because of the emotions and expectations involved. You'll need to decide, for example, whether to leave an equal amount to each child, provide more to one than the other for various reasons, or leave enough money to cover college and graduate school for all of your grandchildren. You may also need to consider leaving money to others who are dependent on you.
While your answer to the first question will impact the lives of a few--your heirs--your answer to the second question has the potential to impact the lives of many. …