The ability to provide for your loved ones after you are gone is an opportunity not just for the wealthy, but also for those with modest possessions. You do this by estate planning—organizing the disbursement of your assets. This safeguards your family, helps you to accomplish your goals, and perpetuates your values. It can also make a lasting contribution to associations that have positively impacted your life.
Benefits of an Estate Plan
To generate a reliable and all-inclusive estate plan, prioritize your personal goals. Depending on what you want to happen to your estate, you can:
- Ensure you keep control over your assets while you’re alive and well
- Choose which of your loved ones will make decisions for you, should you be unable, including financial, health care and life support decisions
- Plan for your disability without the expense, delays and complications of court-supervised guardianship proceedings
- Avoid a nursing home placement as long as possible if you prefer in-home health care
- Preserve the privacy of your estate from solicitors, business competitors or others with dubious motives.
Why Estate Planning Is Important
Estate planning is essential since it gives you a chance, while everything is still alright, to choose how to disburse your belongings. You are managing your assets today for tomorrow. It allows your loved ones space to grieve without having to carry the burden of fairly distributing your possessions. It also prevents unnecessary feuds that may occur when estate planning is absent.
The Key Steps to Estate Planning
Make a will
State who you have selected to inherit your possessions, and identify by name the person who will care for your dependents. Learn how to Create a Will here.
Formulate health care and financial directives
Spelling out your health care and financial desires can be your safeguard should you become incapable of making medical and finance decisions for yourself. Make your living will and appoint a health care and financial power of attorney, who will make decisions if you’re incapacitated.
Submit beneficiary forms
Designation of beneficiaries for your accounts and retirement plans renders the account automatically payable on death to your beneficiaries, eliminating probate.
Think about life insurance
Do you have underage dependents? Are you a homeowner? Do you owe estate tax or have significant debts? If you answered “yes” to any of the questions, consider life insurance.
Save for funeral expenses
You can open a payable-on-death account at your bank and deposit cash into it to cover your funeral and associated costs.
Decide final preparations
What are your wishes concerning organ and body donation? Do you prefer burial or cremation?
Plan ahead for your business
Are you the sole owner of a business? What is your succession plan? Are you in partnership? Consider a buyout agreement.
File your documents
Wherever you store them, your vital documents, such as will, title deeds and so on, should be accessible to the person you identify in your will to manage your property after your death.
Estate Planning Documents
Estate planning involves specifics of decisions on matters that will arise upon your death and certain concerns that might come up during your lifetime. As a result, this process may involve the creation of several legal documents that communicate your wishes, decisions and plans. Common estate planning documents include:
- Insurance policies
- Title/real estate deeds
- Certificates for stocks, bonds and annuities
- Details of bank accounts, mutual funds and safe deposit boxes
- Specifics of retirement plans, 401(k) accounts or IRAs
- Details of debts, credit cards, mortgages and loans, utilities or unpaid taxes
- Specifics of funeral prepayment plans and any final arrangement directives