The Three P’s of Estate Planning

Whether you are just starting to think about putting together an estate plan, or you need to change one that you already have, it is helpful to think of estate planning in terms of the “three p’s”.

What are the Three P’s of Estate Planning?

Put simply, the three p’s of estate planning are the people and property that you need to include in your plan, as well as the plan that you put together to deal with them.

To help make this more clear, let’s discuss these one at a time.

People that you care about

As you start to think about the planning process, it is important for you to make a list of all the important people in your life. This could include your spouse, children, parents, siblings, etc.

The term people might also include neighbors, extended family and friends, and even charitable causes that you care deeply about. You may also list your pets if they have an important place in your life.

As you put together this list, remember to make notes about who this person is, why they are important to you, and what role you might want them to have in your estate plan. Would they be a simple beneficiary, or are they someone who you would appoint as executor, give them power of attorney, or make them guardian of your children or pets?

This is all important, and this is where the planning process really begins… even before you step foot in a lawyer’s office.

Property you own or control

The second P is property that you own or control. At this point it might be helpful to prepare a spreadsheet and start listing out everything you own and what it is worth. Starting to put this list together will start to empower you about the planning process.

By doing this, you can start to become more financially organized and start to understand what is truly at stake should you fail to put a plan in place.

Here are some of the asset categories that you will want to address:

  • Real estate (and mortgages)
  • Bank accounts
  • Retirement accounts
  • Physical property of substantial value
  • Business interests
  • Vehicles
  • Life insurance
  • Possible future inheritances (if known)

It isn’t necessary to have account numbers, or exact dollar amounts, but estimates of value are helpful.

Planning

The final P in the process is to start planning. This is where you start to look at your list of people that you care about, and the property you own or control, and start to think about what will happen in the event of your incapacity or death.

What do you want to happen to your home? How would you divide your life insurance?

Who do you want to make financial decisions in the event you are incapacitated? What about health related decisions? Are these people one and the same? Who would you want to serve as guardians of your children? Who would manage the finances for your children until they are mature enough to do it themselves?

In the event of your death, do you want to spare your heirs the cost and time involved to go through the probate process? Do you have an estate that may be subject to estate taxes that you need to plan for? What charitable plans do you have?

Is there someone in your family that you would like to receive a substantial amount of money because they have a greater need? Or perhaps someone who you want to receive money, but you are concerned about their ability to manage it on their own?

When you are Ready

As you start to go through this list, you will start to form the foundation of your estate plan. You will start to understand, on your own, why estate planning is so important to you and to you family.

When you are ready to get started, feel free to give us a call at (919) 460-5422 or fill our our contact form to schedule your wealth planning session.