Putting Your Plan into Effect

The sixth and final step in developing an effective estate plan is to put your plan into effect. 

 

If you've been conscientious enough to work your way through the first five steps, then this step will be easy and fun.  Actually, putting your plan into effect consists of a three-step process all by itself:

 

Last Will and Testament
Living Trust Instrument
Health Care Proxy
Living Will
Durable Power of Attorney

Once signed, these legal documents should be kept in a safe place where they will be protected from fire and water damage, theft, and other destructive forces. You should always retain a copy of each document so that you can refer to it whenever necessary without going to the original.

   If your estate plan consists of a living trust, then the second step is to fund it.

Although some people use a living trust solely as a vehicle to distribute property after death, the majority of people today utilize a living trust to avoid probate and to provide management of their property in the event of a disability. In both of these cases, a living trust is only effective if it is properly funded.

Funding your trust (i.e., transferring ownership of your property to the trust once it is established) is a critical step in setting up your living trust. For a detailed explanation as to how you actually transfer different kinds of property to your living trust, please see How to Fund a Living Trust.

  The third step is to communicate what you've done.

Communication is essential to the overall effectiveness of your estate plan. That's not to say that you should tell everyone how much money you have or what you plan to do with it.

What you should do, though, is communicate your wishes to the people who will be instrumental in carrying out your plan. For example, if you have minor children and name a guardian under your Will, then you should let your designated guardian know, obtain his or her consent, and discuss how you would like your children raised if you're not able to do it on your own.

You should do the same with any successor trustees named under your trust instrument. They should be fully prepared to take over when the time comes, including having a full understanding of your wishes for the beneficiaries, their special interests and needs, your investment preferences, and the like. The same is true for your funeral and burial preferences. You can put certain legal arrangements in place through legal documents, but your feelings, your preferences, and your beliefs won't be known unless you communicate with the individuals who need to know.

We'll have much more to say on this topic later on. For now, if you complete each of the steps outlined in this segment on setting up an effective estate plan, you'll find that the process is relatively staightforward, almost painless, and very cost effective. In no time at all, you'll be able to sit back, take a deep breath and say,

"I should have done this a long time ago! "