Many individuals never think about how their possessions will be distributed once they die—perhaps because they simply lack knowledge about how estate planning is supposed to work. In this post, we’ll provide 10 simple steps you can use for creating an estate plan—and while these steps don’t cover every possible contingency, they will certainly provide you with a firm foundation.
The first step in the process is to recognize the importance of a will. This is something everyone should have, as it helps determine who gets what; it identifies which bills need to be dealt with upon death; and it gives final instructions for any assets that cannot be transferred. Bottom line: A will helps you clarify your wishes, and keep your estate out of intestate or probate courts.
What assets do you hold? Are there shared assets? Who receives which item? Who will take care of the children and/or pets when you die? Who handles the bills and medical decisions if you are incapacitated? These are all important questions to think through; a will and probate lawyer can help make sure you cover all your bases.
Next, write up a rough draft of your will. This should encompass general items like a breakdown of all assets, how they will be disposed of, a list of executors and designated guardians, and identification of all heirs, trustees, and beneficiaries. You can do this on your own, but it’s usually best to ask an estate planning lawyer for assistance.
Select a person or group of people who will set the will into effect after you pass on. Executors also handle outstanding dues, like taxes and debts. This should be someone you trust to be responsible in carrying out your wishes, such as a family member, close friend, or a lawyer. (If you ask an estate planning attorney, of course, there will be fees—but this can be taken care of by the estate itself.)
In addition to choosing the executor or administrator of your estate, you may also want to clarify Powers of Attorney. This is a power granting a chosen person the ability to act on your behalf in the event of incapacitation. The person you name will be vested with both the power to act and the responsibility to carry out financial or legal matters in your name.
We also recommend writing a living will, which will lay out your wishes for what should be done if you are incapacitated or have a terminal illness. Also known as advanced medical directives, these instructions are meant to give clear intention from the patient regarding how they wish to spend their final days in the event that they can no longer communicate.
Along similar lines, consider the Healthcare Power of Attorney. This works alongside the living will and Powers of Attorney by having a medical expert vouching for the patient’s medical wishes. The medical proxy is expected to understand the medical situation, make decisions with the patient’s best interest in mind, and have the clarity of mind to handle the situation.
The will isn’t something you set and forget; it’s advisable to update it often—as often as once each year, in fact. You may need to add or remove assets and liabilities; name new administrators of the estate; list new beneficiaries; and more. Your will should always reflect any recent life changes, like marriage or divorce.
Communication is one of the keys to effective estate planning. Discuss your will with anyone who is named in it or affected by it, and make sure you keep your executor in the loop at all times.
Finally, ask your will and probate lawyer if you might need a trust, as well. A trust protects assets from extra taxes taken once the will takes effect, as well as creditors and potential lawsuits. Additionally, it reduces the extended period needed for probate court. Finally, a trust can keep assets safe for future use by young children.
These 10 steps may seem like a lot—but remember: By following this paradigm, you’re securing your legacy, and ensuring that your loved ones are taken care of even after you die.
Also remember that an estate planning attorney can help you get all your ducks in a row. Singh Law Firm can help answer any questions you may have about wills, how to assign a Power of Attorney, whether you need to worry about making a living will, and beyond. Learn more by reaching out to Singh Law Firm today.