Creating an estate plan is one of the best things you can do for yourself and the ones you love. Knowing that your prized possessions and assets will go to the ones you choose brings peace of mind.
When family members are grieving, it’s stressful for them to try and divide family assets. This often creates resentment among family members during an already difficult time.
When your family knows your wishes, they don’t need to worry because you’ve done the work for them.
Many people put off estate planning because it seems like a daunting task. But it doesn’t have to be that way.
Don’t wait. Here’s an 11-step estate planning guide to help you set your future.
1. Create a Will
Your first step in estate planning is to make a will. It’s a critical part of a proper estate plan. Without a will, the government is in charge of distributing your assets.
With a will in place, you decide how to distribute your assets and wealth. You can also appoint a guardian for your young children, in the event that another parent cannot care for them.
An attorney can help you draw up a will. You must document all that you own and owe and consider which beneficiaries you would like to receive your various assets.
2. Provide for Minor Children
If you have minor children, you want to make sure to name a guardian for them in the event of your death or the death of the other parent. Children need an adult to handle any assets they inherit.
This may be the guardian you choose to care for your children or it could be someone else. It’s difficult to think about naming a guardian, but it’s a gift to your child to plan for their care.
If you have a child with special needs, you should consider and document your wishes and strategies for their future care.
3. Make a Living Will
A living will, also called an advance directive, is a legal document that outlines your wishes should you become seriously ill and unable to communicate about your care preferences.
A living will prevent your family from having to make difficult decisions regarding your care. You can include instructions about life-sustaining procedures such as breathing and feeding tubes.
4. Arrange for a Power of Attorney
With a power of attorney or POA, you choose someone to make decisions on your behalf if you cannot. You can declare your choices for healthcare in your living will and appoint someone to carry out your plan.
You also want to appoint someone to handle your financial matters such as managing bank accounts, selling properties, paying taxes, and more.
5. Naming Beneficiaries
You should appoint beneficiaries for your financial accounts and retirement plans and file the appropriate paperwork. Doing this helps to ensure these assets are payable to the ones you choose, and your beneficiaries can avoid the probate process.
This will save time and money for your beneficiaries while ensuring they receive your gift to them. It’s a good idea to have an experienced attorney to help you develop a solid estate plan. Attorneys, like the ones of Verhaeghe Law, have years of experience helping people prepare wills and plan for the future.
6. Consider Buying Life Insurance
If you have young children or others who rely on your financial support, life insurance may be a good idea. Life insurance will provide beneficiaries with a source of cash, and they can use it to pay any outstanding debt you owe or estate taxes.
7. Plan for Your Business
If you own a business, you want to plan for what to do with your business if you pass away. If you’re a sole owner, you should name a successor.
If you are a member of an LLC or are a shareholder in a corporation, it’s wise to have a buyout agreement in place.
8. Consider Digital Assets
Most of us handle some financial matters through email and online accounts including banking transactions, PayPal, social media platforms and others. While it may seem trivial, it’s a good idea to sit down and list all of your relevant logins and passwords.
You can choose someone you trust to have access to your various online accounts if you become unable to handle your affairs or after your death.
9. Plan for Funeral Expenses
Planning and paying for a funeral can be a burden on children and family members. Instead, you can alleviate this burden by setting up an account to cover all of the expenses for your funeral.
It’s an act of generosity to spare your family members and heirs from costly funeral expenses.
10. Instructions for Final Arrangements
Funerals are expensive, and one of the ways you can protect your loved ones from this expense is to plan your funeral ahead of time. Make sure you leave instructions for your funeral wishes and whether you prefer a burial or cremation.
This helps ensure your body will be disposed of according to your preference. Leave instructions as to whether you wish to be an organ or tissue donor as well.
11. Protect your Documents
After you complete the steps for planning your estate, you want to gather all of your important documents and keep them in a safe place. This includes documents such as your will, insurance policies, mortgage, bank account information, and other important paperwork.
Make sure you designate the person you wish to have access to these important documents.
Following an Estate Planning Guide
Once you have an estate plan in place, you can feel good that you are in charge of who receives your property and other valuable assets. You can’t underestimate what a gift an estate plan is for your heirs.
A qualified attorney can help you with your will and estate plan. Following an estate planning guide isn’t complicated, and you can feel confident that your prized possessions will go to the loved ones you choose.
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