Basic Estate Planning Tips

I've been retired for almost 20 years, and it's easy to pat myself on the back for doing my estate planning correctly. After working in different careers for more than a decade, I managed to land a job at Prudential Financial, Inc. that lasted 25 years. Starting from the first months on that job, I followed my plan to build an estate that now allows me to live comfortably in retirement and share my success with my children.

When to Start Estate Planning
You should begin your long-term plan as soon as you're earning a steady income. Although we're currently going through tough economic times, saving for the future is essential. You must find ways to set aside money regularly. With a steady job, the least painful system is through payroll savings. You choose a specific amount to be banked or invested automatically from each paycheck. When you and your family live within your budget, you don't miss that deduction. My company added incentive by matching up to three percent of my pay into my savings account, giving me the equivalent of six percent growth on the principal each year, all tax-free.

I enrolled early in our company investment plan, and fortunately, never had to withdraw any until after I retired. In addition to building an estate, it became a welcome supplement to my pension and Social Security checks. This money also accumulated tax-free, only taxed on its withdrawl, at a lower rate than when I was working.

How to Build an Estate
In addition to starting early to put part of your income into your estate plan, you should consider other assets to build along with money. An interest-bearing bank account grows steadily, but if you're willing to invest elsewhere, it could grow more quickly. If your investment is in the stock market or other uncertain enterprises, it could also disappear quickly. I begin to invest in real estate, rental properties, and slowly built up a nice portfolio of units, which is part of my estate.

Protect Your Estate
Your first responsibility when you're building an estate is to protect your dependents in case you won't be there long enough to fulfill your plan. A life insurance policy to cover that eventuality is a necessity. To diversify your growing estate, consider investments in fixed-income stocks and indices and bonds that are not affected by stock market volatility.

Assure the Future of Your Loved Ones
Long before you consider retirement, write a will and establish a trust through a reliable estate attorney. The legally-binding documents will make certain that those you intend to inherit your estate will receive it under the most favorable circumstances. A will is essential for everyone to ensure their assets are handled as they wish.

Make Frequent Adjustments
As you continue to build your estate, review it annually to check all elements of your plan. Talk with family members and estate planning professionals about taxes, upgrades and possible changes.