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Estate Planning As A Key Part Of Wealth: The Only Guide You’ll Need

Even though everyone can have a different definition of wealth, most people agree that it typically means having a comfortable lifestyle without financial stress. Wealth management is an excellent way…

August 22, 2022

Written by Ty Bongiovanni

Even though everyone can have a different definition of wealth, most people agree that it typically means having a comfortable lifestyle without financial stress. Wealth management is an excellent way to help maintain or grow your wealth through various investing, budgeting, and risk management strategies. Working with a wealth expert can help you create a comprehensive plan to achieve your goals.


Risk management is a crucial part of wealth management. No individual or business can afford to take unnecessary risks with their money – not when there are so many different strategies for mitigating those risks. Specifically, estate planning can be useful in protecting your assets and ensuring they’re passed on to your loved ones if something happens to you.


This blog post will cover estate planning as one of the main risk-management tools. We’ll discuss what it is, what it includes, and how you can start setting it up for yourself and your family. We’ll also look at some of the benefits of estate planning and the consequences of not doing it. If you care about your wealth and want to protect it from unnecessary risks, this is your guide.

Different Strategies For Risk Management

There are many ways to manage risk; the best approach depends on your specific goals and circumstances. Remember that you may use more than one of these strategies at a time to help reduce your risk further.


Some common risk management strategies include:


  • Diversifying Your Investments: Diversifying means investing in various asset classes so that if one goes down in value, the others can help offset the losses. For example, you might invest in stocks, bonds, and real estate.


  • Buying Insurance: Insurance can help protect you from financial losses due to accidents, illnesses, or other unforeseen events. Many types of insurance are available, so make sure you choose the right coverage for your needs.


  • Managing Your Debt: Too much debt can be a significant financial burden, so keeping it under control is essential. Try only to borrow what you can afford to repay and pay off high-interest debt as quickly as possible.


  • Estate Planning: Estate planning can help ensure the care of your loved ones and the distribution of your assets according to your wishes. We’ll delve deeper into estate planning in the following sections.

What Is Estate Planning, And What Does It Include?

Estate planning is preparing for the transfer of your assets after your death. It involves deciding how to distribute your property, who’ll receive it, and when they will receive it. Estate planning also entails making provisions for the care of your minor children and family members with disabilities.


Additionally, you can minimize taxes on your inheritance through estate planning by taking advantage of tax-saving strategies. It can also help protect your assets from creditors and lawsuits if you have a high net worth.

How To Do Estate Planning

Inventory Your Assets

The first step in estate planning is to inventory your assets. Figure out what you own, from your savings and investments to your home, jewelry, art, and collections. Make a list of all your assets and their approximate value.

Determine Your Goals

After you’ve inventoried your assets, the next step is determining what you want to do with them. Who should inherit your property? When do you want them to get it? Do you want to set up trusts for your beneficiaries? Make sure your estate plan aligns with your overall financial goals.

Create Your Documents

Once you decide how to distribute your assets, you should create the necessary legal documents. Consider making a will, trusts, powers of attorney, and advance directives. You’ll need to name beneficiaries and trustees in these documents and specify how and when to distribute your assets.

Consult With A Professional

As estate planning can be complex, consult a financial advisor, lawyer, or another expert who can guide you through the process. They can show what documents you need and how to create them. They can also answer any questions you have about estate planning.

Review And Update Your Plan

Regular reviews and updates to your estate plan are advisable, especially when you go through a major life change like having kids, getting married, or purchasing a property. Keep your documents up to date and guarantee they still reflect your current wishes.

Who Needs Estate Planning?

Everyone can benefit from estate planning, regardless of their age or the size of their estate. Even when you don’t have a lot of assets, you should designate a beneficiary for your life insurance policy and retirement accounts. If you have minor children, you must appoint a guardian if something happens to you and your spouse.


Estate planning becomes even more critical as you accumulate assets and become more financially successful. If you have a high net worth, you’ll want to take steps to protect your assets from creditors and lawsuits. Furthermore, business owners and entrepreneurs should have a comprehensive estate plan to ensure that their businesses can operate smoothly after their death.

What Happens If You Don’t Do Estate Planning?

If you don’t do estate planning, the state law will determine how to distribute your assets. This process may not result as you’d want, and it can be costly and time-consuming. You’ll put your family in a difficult situation, having to go through a stressful legal process in the middle of an already emotional time.


Without an estate plan, you also lose the opportunity to minimize taxes on your inheritance. If you have a high net worth, your heirs could be subject to a significant amount in estate taxes. Finally, if you have minor children, the court will appoint a guardian for them. The guardian may not be someone you would have chosen, and they may not share your values or parenting style.

Things To Consider When Deciding About Your Assets

There are many different factors to consider when estate planning, but some of the most important include:


  • Who will inherit your assets? Consider what your beneficiaries will need. If you have young children, they may need money for college tuition or other expenses. You should also decide if you want to leave money for charity or other organizations.


  • How much control do you want over what happens to your assets after you die? Setting up trusts is a good idea when you’re worried about how your beneficiaries will handle their inheritance. Trusts can help protect assets from creditors and lawsuits and ensure that the money goes toward its intended purpose.


  • How can you minimize taxes and expenses? Some ways to minimize taxes on your inheritance include using trusts and gifting assets during your lifetime. Keep in mind the costs of probate and estate administration.


  • What are your wishes for end-of-life care? You should designate a healthcare proxy to make decisions about your medical care when you can’t do so. You should also have a living will that outlines your wishes for end-of-life treatment.

Different Estate Planning Documents You Can Use

  • Wills: A will is a legal document that specifies how you want your possessions to be transferred in the event of your passing. You can designate a guardian for your minor children in your will.


  • Trusts: Trusts are legal entities that can hold assets on your behalf. There are different types of trusts, but they all have one purpose: to help manage your assets and protect your beneficiaries.


  • Durable Powers of Attorney: With a durable power of attorney, you can appoint someone to manage your finances. They will be able to make decisions about your bank accounts, investments, and other assets.


  • Healthcare Powers of Attorney: A healthcare power of attorney allows you to designate someone to make medical decisions on your behalf. It applies to both end-of-life care and general medical choices.


  • Living Wills: A living will is a legal document that outlines your wishes for end-of-life care. It’s different than a healthcare power of attorney because it only takes effect if you’re incapacitated.

The Cost Of Estate Planning, And Is It Worth The Investment?

Estate planning can be costly, depending on the complexity of your financial situation and the type of documents you need. However, the cost is typically worth considering the confidence it provides and the protection it offers your loved ones.


Some people choose to do their estate planning by using online resources or software. While this method can save you money in the short term, it’s usually not a good idea. Without professional guidance, you may make mistakes that could cause problems down the road. If you’re concerned about the cost of estate planning, talk to a financial advisor to see the options available.

Nesso Wealth – Helping You Consider Your Legacy

Estate planning is an integral part of wealth management, but it’s not something you have to do alone. At Nesso Wealth, we can help you consider your legacy and create a plan that may protect your assets and provide for your loved ones. We’re here to guide you in navigating this complex process and ensuring the fulfillment of your wishes.


Our reliable legacy planning solutions are tailored to your unique needs and goals. We work with you to comprehend your wishes and create a plan that meets your objectives. We’ll help you with the necessary legal documents, including trusts, wills, and powers of attorney. With our trust services, you won’t have to go alone through selecting a trustee and managing the trust. Contact us to learn more about how we can help you plan for your future.



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