To download a printable version of this transcript, click here.
 
 
iQuestions Faculty, Ron Blue 
 
 
Question: 
 
What are the six steps of estate planning and wealth transfer? 
 
Answer: 
 
You know, I’ve never baked a pie, but I know from watching my wife 
and my daughters and grandmothers, and so forth, bake pies that 
they follow a recipe. They don’t just take all the ingredients and throw 
them into a box or into a pie pan and assume that the pie’s going to 
come out. They take step one, step two, step three, and step four.  
 
I’d like to suggest to you that wealth transfer and estate planning need 
to follow the same type of process. In other words, there’s a 
legitimate, logical, rational step one that you take before you go to 
step two, before you go to step three, before you go to step four, and 
so forth. And I think there are six steps, or six decisions, or six pieces 
to the recipe that needs to be followed in sequence. 
 
The first step is to figure out who’s going to get it. I need to make the 
decision as to who is going to get it before I make the decision as to 
even how much. So, it could my heirs, or it could be charity, it could 
the government and the attorneys. But I need to decide who’s going to 
get the estate first.  
 
Secondly, then, I need to decide, well, how much is each one of these 
individuals or organizations going to get before I go to the third step, 
which is the timing question, and that is “when.” In other words, if I 
have an estate, I could choose to begin transferring some of that now, 
and avoid the tax consequences later, as opposed to waiting until 
 
 
later. When do I want to transfer this estate? Do I want to be doing 
my giving now? Or do I want to do my giving later? 
 
And the fourth step is when I transfer it, do I really transfer the title 
also? In other words, do I really give a gift with no strings attached? 
Do I transfer my business with no strings attached? Do I transfer 
whatever assets that it is with no strings attached? 
 
Then, fifth is the tools and the techniques. I know this that if a client 
would come to me, I want to give to my children this amount and tell 
me how much and when they want to give it and what type of asset it 
is, then I can use the tools and the techniques to figure out the best 
way for them to do that from a tax efficiency stand point.  
 
What I’ve found is that most estate planning begins with the tools and 
techniques and then it backs into the answer to the rest of the 
questions. But I submit to you that the tools and the techniques 
should only occur after you’ve gone through steps one, two, three, and 
four first.  
 
And then lastly, and perhaps not only lastly, but on an on-going basis, 
the sixth step is the “talk” step, and that is the communicating the 
why, the who, the how much, then when, and the what to the 
beneficiaries.  
 
Judy and I not long ago had a family conference, and we said, to our 
five children and the sons-in-law and daughters-in-laws, “This is what 
we’re planning to do with our estate. This is why we’re planning to do 
it.” And we’re able to begin a dialogue of telling them what it was that 
we were going to do. We didn’t tell them amounts. We didn’t need to 
do that, but what we what did want them to know is why we had made 
the decisions that we had made. But it began first of all with the 
decision, how much are we going to leave to whom and when?  
 
Blue -2- 
 
 
So, my challenge to you is to start right now thinking about, “Where 
would I like my estate to go to?” And you know that your estate 
doesn’t need to be big to be thinking about to whom it goes to. What 
about your stuff? That’s probably the biggest issue. What about the 
pictures? The artwork? The furniture? The cars? The heirlooms that 
you have? Who’s going to get that? You know, it’s better to begin 
talking about that now, as opposed to letting your heirs fight over it or 
discuss it or argue over it, after your death.  
 
I even had one client of mine who talked to their children about it, and 
they put stickies on the back of all of their pictures and all of their 
things, so that when the time came to distribute all that, it had already 
been decided. You know, it’s better to decide it ahead of time, as 
opposed to afterwards, when there can be misunderstandings and 
wrong expectations.  
 
So, begin your wealth transfer planning now, by determining who’s 
going to get what and when they’re going get it.  
 
 
Blue -3- 
To download a printable version of this transcript, click here.