Learning about estate planning now is more important than ever. Even if you don’t own a property, you still have your car, some possessions, and clothing to pass down. You don’t want to leave your loved ones behind without anything. Without an estate plan, the court will intervene and decide who will inherit your assets.
But creating a good estate plan is easier said than done. There are a lot of things you need to prepare and some you need to learn. This article will go over what you need to know about estate planning, including working with estate lawyers. It also explains what to include in the plan and how the process will take place.
What Is Estate Planning?
Estate planning outlines how you want to transfer your estate when you die or are unable to manage things. The term “estate” can mean a property of your own, money, pensions, life insurance, cars, personal belongings, and even debt you owe.
It also includes arranging financial and medical choices for you. An estate plan, for instance, can specify who will handle your affairs if you’re unable to do so due to an accident or illness.
Should You Work with Estate Planning Lawyers?
Most people don’t want to touch the subject of estate planning because they don’t want to talk about death. Just consider your valuables and who you want to inherit them once you pass away. You run the risk of leaving your family battling over your possessions if you don’t plan right away. Even worse, the state can acquire your estate rather than a close relative.
If you feel too busy to take care of it, remember that it only takes a few minutes to fill out the forms. You can also work with estate planning lawyers to guide you throughout the process. It’s a complicated task that requires legal knowledge so it’s best to hire a lawyer before going through it.
These lawyers help you decide and create a plan to specify what happens to your assets after death. They pay attention to your preferences and priorities as well as the particular needs of your family.
Some people will leave minor children, relatives with special needs, or other dependents. An estate planning attorney makes sure they will have safety and financial stability. They’ll help you create a special needs trust and prepare legal documents. Estate law attorneys can take care of whatever your family’s planning needs.
Estate Planning Checklist: What to Include in Your Plan?
There are a lot of things to include in your estate plan aside from what happens to your assets. The kinds of documents you should have in your estate plan vary from state to state. It’s important to consult an estate attorney while preparing these documents.
Generally, you need to at least have a last will and testament, as well as a durable power of attorney. You can also include other documents like a trust or even medical directions. These make up the main components of your estate plan.
1. Last Will and Testament
You can work with an estate lawyer to prepare a final will and testament. It is a legally-binding document that specifies who will get particular assets once you pass away. If you don’t have one when you die, the state will decide how to divide all of your assets.
2. Power of Attorney
You’ll have to determine the power of attorney to the person you choose to be your attorney-in-fact. That’s why this document is essential to your estate plan.
If you lose the ability to make financial decisions for yourself, it is the responsibility of this person to act on your behalf. They will be in charge of organizing your financial matters for you and intervening as necessary.
Just like your will and testament, without this, the court will have to interfere. They will appoint a conservator or guardian for your financial needs.
3. Living Trust
You can use a living trust to administer your estate both before and after your death. This helps you avoid probate for assets that would otherwise have to go through this procedure.
It is a contract between a beneficiary and a person, law office, bank, or other entity. The trustee is the person or organization you designate to oversee the assets under the trust. They are the ones who are legally entitled to the property.
You can choose more than one beneficiary, and when there is a good cause, most pick more than one person. With a properly-written trust, it can still take effect even after your passing.
4. Advance Care Directives
When you’re unable to make medical decisions for yourself, you can designate someone to do so. You have the option of choosing either a healthcare proxy or a durable power of attorney for this position. Make sure the person you choose is someone you can trust and that they are aware of all of your expectations.
5. Beneficiary Designations
Most estate plans don’t include beneficiary designations. But if you set these up with other accounts (life insurance, IRA, or 401(k) plan), then you need to include them. If you do so, you need to update these beneficiaries every time you update your estate plan. These will help determine how you want to distribute your assets.
6. Guardianship Designations
Just like beneficiary designations, some wills or trusts don’t have guardianship designations. Choosing a guardian for your children is important, whether you have young children or want to have children.
Be sure the person or couple you select agrees with your viewpoints. You should also find people who are financially stable and interested in starting a family. Without these, a judge can decide that your kids should live with a relative you wouldn’t have chosen. Moreover, in extreme circumstances, the court may order that the state adopt your kids as wards.
Steps to Follow in Estate Planning
Estate planning is an important part of your end-of-life strategy. But it’s more than just compiling some legal documents and calling it a day. Estate planning can be complicated, especially if you have a lot of assets to divide. Find an estate planning lawyer who will work for your benefit.
It also helps to familiarize yourself with the process so that you can make better decisions for your estate plan.
1. Gather Your Assets
Your assets include everything you own and are what makes up your estate. Determine if you want to transfer them to your beneficiaries or sell your assets. You should also include where to put the proceeds should you want to sell your estate.
Collect recent bank statements, retirement, brokerage, and other accounts you have. This also includes any insurance policies and existing liabilities such as mortgages, lines of credit, and loans. Let your heirs know where you held your money.
2. Prepare Estate Planning Documents
Consult an estate planning attorney to help you put up documents for your estate plan.The lawyer can go over the benefits and drawbacks of your plan and help you with your alternatives. They can also provide details on the planning and administration procedure and offer advice on the best strategy to accomplish your goals.
3. Implement Your Estate Plan
After creating your estate plan, you should ensure that it is carried out as you planned. This includes supporting any trusts you form and, if required, renaming property or assets in the names of the trusts.
You should also evaluate all your financial accounts. Make sure that the beneficiary designations are current and represent your desires. This means it should identify the specific physical property and the names of the persons you want to inherit it.
4. Review and Update Your Estate Plan
Things can change after a few years, so it’s important to review and update your plan. Make sure it still represents your wishes. This means the people you want to help you and those you want to inherit any assets still make sense.
There are a lot of reasons why you need to review your estate plan. There may be a huge change in your assets or you got married or divorced. There will also be changes in your health or the people you want to include in the plan. In such cases, you’ll need to check with your attorney and update your estate plan.
Creating a will and testament is just the first step in estate planning. It involves more than just identifying how to distribute your assets after death. Hopefully, this estate planning checklist will serve as guidance to protect your loved ones after death.
Make sure the plan takes care of your family and other beneficiaries. Find out what your family needs and the process involved in planning. Work with estate planning lawyers to gather the right documents for the plan, as well as go through the process.