Many people assume estate planning is all about reducing taxes. But it's also about making sure your assets are distributed according to your wishes both now and after you're gone. Here are three questions to consider before you begin your estate planning.

1. Who Should Inherit Your Assets?

If you are married, you must consider marital rights before deciding who should inherit your assets. States have different laws designed to protect surviving spouses. If you die without a will or living trust, state law dictates how much passes to your spouse. Even with a will or living trust, if you provide less for your spouse than state law deems appropriate, the law will allow the survivor to receive the greater amount.

Once you've considered your spouse's rights, ask yourself these questions:

Should your children share equally in your estate?
Do you wish to include grandchildren or others as beneficiaries?
Would you like to leave any assets to charity?

2. Which Assets Should Your Survivors Inherit?

You may want to consider special questions when transferring certain types of assets. For example:

If you own a business, should the stock pass only to your children who are active in the business?

Should you compensate the others with assets of comparable value?
If you own rental properties, should all beneficiaries inherit them?
Do they all have the ability to manage property?
What are each beneficiary's cash needs?

3. When and How Should They Inherit the Assets?

To determine when and how your beneficiaries should inherit your assets, you need to focus on three factors:

The potential age and maturity of the beneficiaries,
The size of your estate versus your and your spouse's need for income during your lifetimes, and
The tax implications of your estate plan.

Outright bequests offer simplicity, flexibility and some tax advantages, but you have no control over what the recipient does with the assets once they are transferred. Trusts can be useful when the beneficiaries are young or immature, when your estate is large, and for tax planning reasons. They also can provide the professional asset management capabilities an individual beneficiary lacks.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore. For professional advice, contact a Certified Financial Advisor.