Don’t Forget to Plan: The Top Estate Planning Tips Everyone Needs to Know
After the funeral of a loved one, you’re left with the business side of death. And with 60% of Americans not owning a will, chances are you could be left unprepared and in a feud with other family members.
Estate planning is a vital part of ensuring that everything is organized after your death. Read on to discover these estate planning tips to ensure your wishes are carried out.
What Is Estate Planning?
You might not think estate planning is necessary, but everyone is encouraged to do it.
Estate planning means you create a plan for your assets after your death, or to prepare for an event that leaves you unable to manage your affairs. Upon your death, your assets and belongings are given to the heirs you’ve decided in your will.
When you don’t have an estate plan, this means your assets will become the property of the state according to the law, and they decide who inherits your estate. These might not be your wishes, but unless you have a plan and a will, it could get ugly.
If you’ve suddenly realized how important having an estate plan is, but don’t know where to start, never fear! There’s still time for you to create a will and plan your estate the way you please.
1. Create a Will
Without a will, anything and everything can go wrong with your estate. In your will, it’s you who determines who will receive or inherit property, valuables, children, and anything else. Without a will, everything you own is fair game for your state according to the law.
2. Get Life Insurance
Many people don’t consider the benefits of life insurance. Life insurance protects families in the event of your death by paying the benefit of the policy to your family. Most families would benefit greatly from life insurance, but life insurance can even help single, older adults as well.
3. Find a Lawyer
If you’re starting out building your estate plan, it can be very tricky to figure out precisely what you need. Hiring an estate planning attorney, like one from this law firm, will help you asses the best route for your estate. Having an attorney on your side can point you in the right direction.
4. Decide Your Beneficiaries
A beneficiary is the recipient of the benefit of a will or insurance policy. There are typically two different beneficiaries; one is the primary, and the other is the contingent. If the primary is unavailable, the benefits will go to the contingent.
If you have a large estate or multiple people you would be interested in sharing your estate, you can have more than one beneficiary. Take some time to think and talk through your options with your family or estate planning attorney before deciding.
5. Set Up a Living Trust
A living trust allows a person (called the trustee) chosen by you (called the settlor) to manage your assets when, for some reason, you cannot. A living trust is active when the settlor is still alive. Having a living trust eliminates the time spent in court managing your affairs.
6. Find a Power of Attorney
If you’re unable to manage yourself and your finances, you must name someone your power of attorney. It’s even more helpful if you have both a medical and financial power of attorney.
Your financial power of attorney can maintain your finances, and your medical power of attorney will make medical decisions for you.
7. Decide Who Gets What
All your belongings in your estate (think cars, homes, money in the bank, and the like) have to go somewhere when you pass away. Consider your assets and assign them to whom you think is best.
8. Take Care of Funeral Costs
With the average funeral costing nearly $9,000, many families are not prepared to take on this heavy financial burden. Before you pass away, you can set money aside to pay for funeral costs after your death by creating a payable-upon-death account at your bank. The funds transfer to your beneficiary and can only be used to meet funeral costs.
9. What About the Children?
For families with young children, it’s critical that in their will they declare where they wish their children to go and who the guardian will be. Take some time to discuss this with your spouse if you’re married. If you have life insurance, you’ll need to decide where the funds will go as well.
10. File All Forms
Finally, remember to keep all your estate planning documents in a safe place. Anyone who may need to access them (lawyer, beneficiary, power of attorney) can find them easily. With everything neatly organized and accessible, this is a massive help to your family.
Is Estate Planning Necessary?
Planning for your death or even unforeseen life events, which could leave you incapacitated, is rarely on your mind, especially if you’re young. Estate planning could offer you that peace of mind if something were to happen to you. In short, not only does estate planning ensure that your wishes are carried out after your death, but also that your loved ones are not left burdened with complicated matters.
Put These Estate Planning Tips to Use
Estate planning doesn’t have to be difficult, though there may be plenty to comb through. With these estate planning tips, you can feel confident that your estate is handled according to your wishes.
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