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Make estate planning your resolution for 2014

New Year's resolutions invariably gravitate toward things like losing weight, exercising more, starting a budget, quitting smoking and other very worthy goals.

New Year's resolutions invariably gravitate toward things like losing weight, exercising more, starting a budget, quitting smoking and other very worthy goals.

I'm going to focus on a resolution that will have some incredibly enduring benefits - an Estate Plan! Yes, a proper estate planning process will organize your personal and financial affairs

according to your wishes in event of serious illness, injury or death. However, there are some benefits that you may not have thought of. For example:

1. An estate plan will provide peace of mind to you and your family. We all worry about whether all will be in order if we die or become incapacitated. Imagine how soundly you'll sleep if you invest some time in putting a plan is in place.

2. The greatest legacy we can all leave is in harmonious family relationships. Through proper communication, equitable planning and perhaps the use of moderated family estate planning meetings, our heirs can learn a great deal about "paying forward" the love we pass onto their generations. What a way to be remembered!

3. An estate plan can be structured to reward heirs for making good life decisions. On the other hand, it can also prevent a spendthrift heir from frittering the money away!

4. A proper plan will help reduce the corrosive effect of excessive taxation, probate, administrative and legal fees.

5. On your death, an estate plan can protect inherited assets from lawsuits, divorce, creditors and other claims There are a number of tools that will be required in the process and all need to be customized to your own situation.

These include:

1. Legal instruments - including wills, trusts, powers of attorney and representation agreements. For business owners, buy/sell and shareholder agreements may also be required.

2. Life Insurance, Critical Illness coverage, Disability Income and Long Term Care

Insurance.

3. Creative use of beneficiary and contingent beneficiary designations, as well as Joint Tenancy With Right of Survivorship (JTWROS) as a method of bypassing the will and lowering the costs of probate.

In our own practise, we've realized that communication an estate plan with family members is critical to its success. We're working on a toolkit that includes a confidential records organizer, "last and final letter" and a family meeting process.

Estate Planning sounds like such a complicated endeavour. It's really not. It's not something you'll want to do alone though. You'll want to involve your family, including multiple generations, as well as your financial and legal advisors. Try to appoint a coordinator. This could be a close trusted family member or friend, your lawyer, accountant or certified financial planner.

Begin the process by focusing on the goal: a planned legacy that lives on, no matter what.

Richard Vetter, BA, CFP, CLU, ChFC. is a certified financial planner and owner of WealthSmart Financial Group in Richmond.