Estate planning becomes a necessity as we grow older. We begin to worry about our assets and ensuring all our affairs are in order in the case of illness or death.
Without an estate plan, you may have trouble passing assets onto your heirs. You may also have trouble in the event you are incapacitated and cannot make decisions for yourself. Estate plans help avoid the challenges of probate and provide both you and your family with protections for the future.
Creating an effective estate plan isn’t always easy. It can take some time to review all your assets and determine how to divide them up appropriately. To make the process a little smoother, consider these steps:
- Make a list of all your assets. Creating a proper inventory of your financial and physical assets puts all your possession at the forefront and helps you understand the scope of estate planning. Your physical assets include your home, cars, and valuables, such as jewelry and furniture. Financial assets are bank accounts, stocks and bonds, or retirement plans and funds. Don’t leave anything out.
- Make a list of loved ones that you want to protect. You likely have family that you want to ensure will be able to live comfortably even after you pass, including your spouse, children and even pets. If you have children under 18, you can name a guardian who can care for them when you pass.
- Make a list of your beneficiaries. Your beneficiaries can include those on your retirement accounts plus those who are receiving certain assets directly, such as the heir to your home or business.
- Decide on charitable donations. Not everyone wants to give all their assets away to family. Many people wish to leave behind a legacy by donating to a charity, creating their own foundation, or other means of altruism. If you have considered this before, now is the time to put it into effect.
- Decide on directives. Estate planning is more than passing on your assets. You should consider establishing a power of attorney for finances, a medical healthcare directive, and an executor for your estate plan. These are the people who will help make decisions on your behalf when you are unable.
Estate planning can be a difficult undertaking, but it’s an important one. When you have an estate plan in place, you have the peace of mind that you and your family are protected. And if the process seems too daunting, an estate planning lawyer can assist you with navigating all the complicated details.