Ultimate Estate Planning Starter Guide

Who needs an estate plan? You do. That's why we've put together this estate planning starter guide!

According to Richard Bechtol, Esq., an RLS staff attorney and estate planning expert, “anyone owning any assets needs an estate plan, this is especially true for business owners.” In other words, as a real estate investor, you need an estate plan to protect your assets and your family's financial future. 

Bechtol goes in-depth with his video presentation of the ultimate estate planning starter guide. In this article, we'll discuss the key points of how an estate plan works and how it can help protect your assets in the future.

Estate Planning Uncomfortable Truths

Most people don't bother with an estate plan for various reasons. Those reasons include the following: 

  • A belief that only the obscenely wealthy need an estate plan 
  • Discomfort with confronting their mortality; it feels terrible to talk about their death
  • Procrastination--that's a problem for the "future me"
  • The misguided belief that an estate plan is expensive and a burden to maintain

If you don't have a plan, your property goes to probate, which eats away at your estate's value. In the long run, your traumatized heirs will be more burdened, spend more time dealing with legal entanglements and receive less. 

What Should I Do To Start Estate Planning? 

Before you get an attorney, you can start the process of estate planning by determining the following essential items:

  • Create an inventory of all your assets
    • Spreadsheets
    • Programs
  • Determine who your Fiduciaries will be.
    • Trustee
  • Identify your heirs or beneficiaries.
    • Who do you want to leave assets to?
    • How do you want to divide your assets?

What Assets Do I Include In Estate Planning?

The following assets go into your estate planning:

  • Bank accounts
  • Life insurance
  • Ownership interest in a business
  • Personal property
  • Real estate 
  • Retirement accounts
  • Stocks, bonds, mutual funds, and CDs
  • Vehicles

The people involved with your estate will be dealing with your death, and having a clean, well-prepared inventory will make their job much more manageable. 

You wouldn't want a devastated loved one to endure going over your every asset when they are vulnerable. That's when mistakes happen or bad actors swoop in like vultures.

How Do I Find Fiduciaries For Estate Planning?

A fiduciary is a person required by law to manage a person's estate to benefit the beneficiaries. When determining a fiduciary for your estate plan, use the following questions as a guide: 

  • How complex is my estate?
  • Is my fiduciary financially literate?
  • What are my family dynamics?
  • Should I compensate my fiduciary?
  • Do I want more than one person in this role?
  • Do I want them to continue my business or sell the assets and divvy the proceeds?

Beneficiaries And Estate Planning

A beneficiary is the person, persons, or entity receiving your assets. When estate planning, you should consider some critical concepts:

  • Do you have minor children as beneficiaries?
  • Do any children (minor or otherwise) have financial or substance abuse issues?
  • What about contingent beneficiaries?
  • What charitable interests do you have?
  • How will you dispense your retirement accounts and life insurance policy?

Will-Based Vs. Trust-Based Estate Planning

Does will-based or trust-based estate planning work for you? Check out the table below for more information about each type of estate planning.

Will-Based Estate PlanningTrust-Based Estate Planning
Instructions for Probate Court
Court created trust for children under 18
No additional control
Public record
Creditors have access to you and heirs
Can be time-consuming  and expensive
No probate Court
Trust is already created
Additional control
Not public
Protection against creditors
Protection for disabled heirs
Quick and inexpensive

Ultimately, with will-based estate planning, your beneficiaries are at the court's mercy, and your assets are in full view of the public. That means more people can claim your assets. 

On the other hand, a trust-based estate plan gives you control of the assets and how they are designated, anonymity, and protection from creditors. 

Estate Planning Starter Guide For Real Estate Investors

In most cases, trust-based real estate planning is ideal for real estate investors because of the protections it provides. For instance, with trust-based estate planning, you will receive the following: 

  • Additional control over your assets even after you're dead
  • Anonymity and privacy for future generations
  • Continued operation of your business
  • Protected portfolio from creditors
  • Tax benefits of testamentary gift (after death) vs. inter vivos (while alive)
    • Saves on capital gains tax by gifting after you die.

Key Takeaways 

Death and taxes--the only two guarantees in life. You can mitigate the impact of both with careful estate planning. 

No one likes to think about their death, but it happens. There is no doubt that your loved ones will miss you when you're gone. They will be devastated, and dealing with a messy and expensive probate process will crush them even more.  

Protect yourself and your future with an estate plan. Do you have questions about estate planning or real estate investment? Join us for our Royal Investing Group Mentoring to get the answers you seek.

Last Updated: 
February 1, 2023

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

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