What Is Estate Planning?
Even after you are gone, you can bring peace to your loved ones by having a comprehensive estate plan that outlines all of your wishes. Estate planning pulls multiple legal documents together to help ensure nothing falls through the cracks. Consider it a broad overview of your funeral arrangements, power of attorney, wills, trusts, and anything else needed to protect your estate.
Why Is It Important?
While there are usually some general standards in place to divvy up assets, they may not follow your wishes. Plus, other issues may occur without an estate plan, such as:
- Family Disputes – You hate to see it but when it involves money, sometimes we see the worst in family members. To avoid these disputes during an already difficult time, make your wishes clear in an outlined plan of who gets what. This way you can avoid all of your assets being “up for grabs.”
- Leaving Out Minors – Since minors cannot legally inherit assets without a guardian, you must designate guardians for the minors and set up trusts. This way, what you leave to your young kids or grandchildren stays protected and secured until they reach a certain age.
- Excess Taxes – Without proper beneficiaries updated, wills and trusts instated, and an overall estate plan, the government has to get involved to help make the proper adjustments. This results in more taxes taken out of your assets before they get to your loved ones.
- Unable To Support Them Financially – Bills and keeping food on the table are still a priority for your loved ones, even after you are gone. You can help them by dividing your assets and ensuring every loved one is financially secure.
Estate Planning Checklist
There is more than you think when it comes to getting your ducks in a row at the end. There are several documents to fill out and you must review existing information to make sure it is accurate. The following checklist starts your estate plan and helps your loved ones in the long run.
- Make a list of assets & debts
- Review retirement accounts and check that beneficiaries are accurate
- Ensure beneficiaries are accurate on insurance information
- Consolidate accounts and assign a surviving member to handle your accounts
- Write a will
- Assign a power of attorney who can make healthcare decisions on your behalf
- Create a trust
- Write instructions that summarize your funeral plans, who to notify about your passing, and how to find and access your assets. It’s a good idea to make a list of usernames and passwords for the right person to access your accounts.
Ask Questions
To ensure all your affairs are in order, hire an estate planning attorney. They can help answer all your questions and get the right paperwork filed. They can also make sure nothing slips through the cracks while taking care of more complicated situations like a complex family tree, having significant assets, or owning a business.
Once you have a plan in place, know that it isn’t set in stone. You can always go back and make the necessary changes. Remember, this plan is to establish your wishes, so don’t be afraid to ask questions and always put what you want in writing.