Estate plans are as much for you as they are for your loved one. By not having a plan in place, your family may be required to make life and death decisions, your assets may go to unintended relatives, and children could be raised by someone appointed by the state.
Fortunately, for most families, estate planning is not complicated. But planning does require making a commitment to completing the necessary paperwork that will be honored in your state. While many documents can be completed on your own, it is wise to have an attorney specializing in estate planning to review them on your behalf.
The estate planning process can be broken down into six steps.
Create a will – This is the most basic estate planning tool. A last will and testament will provide instructions as to who will inherit your belongings. Bear in mind, assets will still need to go through the probate process. This means your estate will become public and incur costs to your family.
Create a trust – Generally speaking, a trust separates ownership from use. Trusts allow your property to transfer directly to your beneficiary, without going through probate. Specialty trusts can also be used to maintain eligibility for government programs, special directives for special needs children, or create spendthrift protections.
Establish directives – Directives are useful both medically and financially and are important in the event you become disabled and lose the ability of decision making. Health care directives will keep your family from having to make life-and-death decisions. Powers of attorney can give family members (or other trusted individual) to make financial decisions on your behalf.
Update beneficiaries – Review the beneficiaries named on all retirement accounts and life insurance policies. Make sure you have named the right people. Do not leave beneficiary information blank as the courts will determine who receives the benefits during probate.
Make final arrangements – When a family is grieving, decision making becomes difficult. Make sure you clearly outline your final arrangements so your loved ones can make sure your wishes are met and to avoid conflicts.
Purchase life insurance – Evaluate your family’s life insurance needs and purchase an appropriate amount of coverage. If you are a business owner, life insurance is critical to allow your company to continue operations and maintain preferred ownership positions. Consult with a licensed insurance agent on the best options available to you.
Your estate plan is a living blueprint. Make sure you annually regularly review your plan so it may keep pace with the changes in your life. Also, make sure your documents are stored safely, and in a location known by a trusted individual.
Estate planning will provide the peace of mind knowing of knowing your family will not need to worry about making difficult decisions during the somber time. If you have any questions regarding estate planning or would like assistance starting your estate plan today, please contact my office.