Estate planning may seem like a grim thought, especially when you’re in your twilight years. But, one should also take comfort in the opportunity that you still get to grant deserving people the assets you worked hard to earn in your life. Not only that but preparing it now while your physical and mental capacities are still sound, you’ll save your heirs the typical complexities of leaving without a last will.
1. Enlist Professional Help
If you need ample information about estate planning, you can contact companies such as Mile High Estate Planning to inquire about it. You can hire an estate planning lawyer if you feel like you need a walkthrough of the planning process. A capable attorney will help you create the necessary documents containing your wishes. It’s your estate attorney’s role to enforce the content of those documents and make sure that your wishes are granted.
2. Prepare A List Of Inventory
Work with your attorney and go through your assets, investments, savings and checking accounts, retirement and 401K, and insurance. Include valuables in your home, such as indoor and outdoor furniture and equipment, jewelry, art pieces, electronics, and other collectibles. Manage your time well as it may take a while to ensure that you don’t forget anything or anyone to whom you want to inherit the items in your list.
You may also be investing money online. It’s imperative to note all of your investments and make them known in a list. Enumerate the online brokers you’re using, the login details, the amount, and special instructions, if any. Likewise, if you’re into digital marketing and have online businesses, these should also be included with details on how to manage them.
Next, gather important documents, such as land titles, deeds, medical records, insurance policies, and doctors’ contact details. If you have debts, include them in a separate document, such as credit cards, mortgages, business loans, home equity lines of credit, and other types of loans.
3. Draft Your Last Will And Testament
The last will is a document that will name your assets and those who will receive them upon your death. Anyone can draft a will at the age of 18 years old before they pass away. It also includes who will take care of the children and if they have any special care. If you have pets, you may want to include them as well.
It would help if you also named your preferred executor. It can be your attorney, your surviving spouse, or anyone you trust to follow your desires. If you perished without a will in place, your property would be distributed by the court under your state’s intestacy laws. The state typically awards the assets to the closest family members. That could be a problem if you promised some part of the estate to someone outside of the immediate family.
4. Draft Your Advance Directive
An advance directive or a living will is a document that you must also draft. It will contain your instructions regarding health and medical directives if you have a progressing medical condition. It’s imperative to create a living will before you become too sick to let your desires known. Include what hospital do you want to be confined in, if you will donate your healthy organs, and if you’re going to be buried or cremated.
There’s also a choice for preparing your funeral so that loved ones won’t have to worry. At the same time, you can also create advance directives for your pet if they have an illness. Again, this document is subject to state laws, so you must have legal representation to help you create one.
5. Set Up A Trust
If you accumulated debts in your lifetime, creditors would surely demand payment for those debts. An irrevocable trust is absolute and will protect your assets so that you can directly pass them on to your beneficiaries. Contrary to popular belief, it’s not just for the wealthy. Anyone with a property they want to protect can make use of a trust.
There are benefits to using trusts, including:
- You transfer your assets directly and avoid probate
- It helps you avoid taxes, especially if you have a surviving spouse.
- You can place instructions on the distribution of your assets when you become incapacitated
- Useful only if you’re alive, but incapacitated to make decisions on estate planning.
There are different types of trusts that you can draft for various situations. These include:
- Revocable Trust – if the person who drafted it wants to make changes
- Bypass Trust – for couples who want to fully take advantage of the tax exemptions upon the first spouse’s passing
- Spendthrift Trust – placed over the irresponsible beneficiary for protection against creditors
- Grantor Trust – contains provisions or power to revoke the trust, the role of the trustee, and the right to receive income from the trust itself
- Irrevocable Trust – even if the assets are non-existent or have been distributed, no one can revoke it
6. Place A Power Of Attorney
Time will come that your illness will take over, and you won’t be able make decisions anymore. Before that happens, you must create a durable power of attorney that names your executor. It could be anyone you trust to oversee the distribution of your assets. For the living will, it must come with a financial power of attorney to help make decisions on your medical concerns. For other family members who wish to coordinate with your doctor, a HIPAA or Health Insurance Probability and Accountability must be in place as well.
7. Check And Update Heirs As You See Fit
Make sure that your executor goes over your financial accounts that name beneficiaries. These can be your bank accounts, insurance policies, pensions, or pay-on-deaths. Check and see if you need to change anything, such as an ex-spouse’s name or a family member who passed away. It’s to ensure that you can allocate the money to a different heir or be split to multiple heirs.
Preparations for your passing can be daunting, which is why you should have someone you trust help you handle the arrangements. They can be a family or an attorney who can only be impartial and follow your wishes. It’s essential to plan your estate matters early so that it becomes easier should the time comes that your assets must be distributed among the deserving parties.