Helping Federal Employees and Annuitants Understand Their Benefits


Estate Planning Introduction

Estate Planning Guide (Part 4)


This is part four of what was to be a four part series on how to prepare for retirement. I decided to break this article (part 4) on estate planning into several digestible parts due to the subject matter. This article will introduce you to estate planning with subsequent articles covering compiling essential data, wills and trusts, and probate avoidance, the nuts and bolts of the subject.

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Getting Started

A heir by definition is, “A person who inherits or is legally entitled to inherit, through the natural action of the law.” Heir is pronounced (air) or (er). I believe many feds ignore estate planning for two reasons; they don’t understand the processes used — think it’s too complicated — or believe that you must have a large estate (BIG BUCKS) before needing an estate plan.

I can tell you from first hand experience that it isn't too complicated and yes.... even the average federal employee should plan for the inevitable to insure those in their life most deserving reap the benefits from their estate. It is also advisable to research and implement your basic estate plan long before you retire, years before you leave considering the value of your federal annuity and other assets that you may have accumulated during your lifetime.

I knew I was going to retire at age 55 and started researching estate planning several years before I left. I found abundant information on this subject — some better than others — and many financial services that are willing to help, often free if you have accounts with them or on a fee basis. I used this research to develop my estate planning and probate avoidance web pages that much of this article is based on.

I am not a lawyer or an expert in this area. This article and my website present my personal experience and perspective based on considerable research and discussions with others in this same situation. I initially used Quicken WillMaker Plus software to draw up our wills and trusts. This software can be used to initiate the documents needed for a basic uncomplicated estate. However, as our grandchildren arrived and situations changed, my wife and I hired an exceptional attorney to update our wills, trusts and many other necessary documents. 

Your Estate

Your personal estate is very simply “your property” – all that you own – at its current market value. The planning that is required does not require you to be a mathematical wiz or rocket scientist – anyone with average intelligence can plan their estate. The key is to have the proper references to help you through the process. I highly recommend Nolo's book titled Plan Your Estate to guide you step-by-step through this process. It is the ultimate estate planning guide and covers all states except Louisiana which has a legal system based on Napoleonic Code.

 When I was completing my estate plan I used this book extensively, highlighting important information, underlining text, and writing notes in the margins. I refer to it as situations change and keep it on my reference shelf next to The Executor's Guide that helps you read wills, transfer property, handle probate and make sense of it all.

When to Hire an Attorney

Many situations require legal help such as providing long-term care for disabled children. If your estate will be subject to estate taxes and/or you own a business consult with a professional. An attorney will provide insight into your particular needs and wishes and they will prepare essential documents such as powers of attorney, health care directives, and others. The key here is that you will have done much of the leg work up front and your attorney fees should be considerably less if you go through this process.

The planning concepts presented here are useful for estates of any size, from modest to those who were fortunate enough to accumulate estates worth millions. There is no one-size-fits-all prepackaged estate plan, everyone’s plan is unique and personal. Going through this process will provide you with a much better understating of your true net worth, your personal desires, and estate planning vision.

Estate planning pays big dividends up front that at first glance seem transparent. By going through this process you will know who will inherit, what they will receive, where all of your assets are now, your total net worth, and it will help you focus on consolidating and simplifying your estate so that you can better manager your assets TODAY. This was a real eye opener for me when I went through this process.

Go to Part 5 - Putting it All Together
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