A Step-By-Step Guide To Estate Planning At Any Age

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Estate Plan, Living Will, and Healthcare Power of Attorney documents

Once you hear about estate planning, most think of it as something only the wealthy does. However, gone are those days, and anyone should consider prioritizing one as early as possible. Doing so will ensure everything is in order in case of your untimely passing. It pays to be ready for anything, considering that tomorrow is never promised. Generally, having a well-thought-out estate plan is one of the best things you can do for yourself and the family you’ll be leaving behind. Having one in place will ensure your family and friends will not face the burden of making stressful decisions, especially during grieving. If you’re eager to know how to create an estate plan, consider checking out reputable legal professionals specializing in estate planning online, such as Hopkinsroden.com and other similar service providers.

Text estate planning on notepad and keyboard on table

A Close Look At Estate Planning

As an overview, estate planning is about creating legal documents that outline your wishes regarding your assets, properties, and possessions after death.

The documents will serve as a basis for deciding how your assets and properties will be allocated to your beneficiaries if you pass away or as a guide for how you want to receive medical care if you’re incapacitated. 

Depending on your life circumstances, there are several specific reasons why estate planning is worth considering. An estate plan is usually the first thing that comes to mind when you have children. Having one will assure you that your children will have adequate assets if you pass away or appoint a guardian to oversee their care.

Estate planning is also crucial for preparation if you become incapacitated and unable to make financial or health-related decisions. Additionally, an estate plan clearly outlines where your assets will go to avoid potential conflicts or misunderstandings among family members, which is likely if you fail to indicate specific beneficiaries. Overall, having an estate plan will give you peace of mind that everything will go according to your wishes once you pass away.

Crucial Steps To Estate Planning

If you’re hesitant about making a move on establishing your estate plan, don’t be. It’s best to start early if possible. Estate planning doesn’t have to be a challenging ordeal. There are several crucial steps to prepare for the planning process, including:

  • Draft A Will

One of the basics in estate planning is creating a last will. If you die without leaving behind one, the government will be in charge of distributing all your assets and possessions according to the laws in your state, which might not be what you want. If you already have a will, you can update it to include additional changes in your situation.

Drafting a will is the initial step in estate planning. You must consider all your assets and assign beneficiaries to divide them accordingly after your death. In most cases, the will can also include specific instructions on your funeral service and whether it’s a burial or cremation.

As a crucial component of your will, prioritize naming a guardian for your children in case of your death. You also need a trusted individual to handle the assets or properties of minor children, so make it a priority to designate someone to tackle the financial aspect. Although it can be the same person acting as the physical guardian, you can choose someone else.

  • Nominate Your Beneficiaries
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A crucial aspect of your estate plan is naming your beneficiaries for the assets indicated in your will. If you want them to access the assets without going through probate court, make sure to include a beneficiary designation form with the financial institution of each account naming a family member as beneficiary. 

Depending on your life circumstances, your list of beneficiaries might change over the years. With this in mind, make it a priority to review the beneficiary designations now and ensure that all the correct forms are filed at relevant financial establishments.

  • Create A Trust

Consider creating a trust when you hold a significant number of assets. The main reason you need one is for the protection of assets for family members later on. Generally, you can utilize a trust by providing a trustee or executor the power to give out funds on your behalf. 

For example, if you want your children to receive money once they reach 18, you can appoint your chosen executor to have the power to hand it out. A benefit of a trust is that all assets or properties will no longer go through probate and will be passed on to the beneficiaries directly. It can save both time and resources for your family.

  • Outline Instructions For Your Healthcare Needs

Another crucial component of your estate plan is carefully outlining instructions for your healthcare. If you become incapacitated, doing this guarantees the prompt execution of all of your wishes.  

It may be best to consider a durable power of attorney for health. When you have this document, you can indicate who’ll gain access to your medical records and other personal documents if you’re incapacitated. It also provides healthcare professionals instructions on the care you want to receive if you can no longer make decisions. 

A living will or advance directive will convey your wishes for receiving medical care if you’re diagnosed with a terminal condition. Remember that it’s vital since it clearly outlines the treatments you want or don’t want to receive.

  • Designate A Power Of Attorney

Getting a power of attorney is also an essential step in the estate planning process. Remember that it’s different from durable power of attorney for health. It’s a legal document that equips an appointed person with the authority to act on your behalf over business or legal matters.

  • Note Down Your End-Of-Life Wishes

Your estate plan should clearly state your end-of-life wishes. Avoid giving your family members the hassle of guessing what you would have wanted once you pass away. Documenting your wishes early on is a good approach for letting them know how you want your death to be handled. 

In most cases, it includes instructions on whether or not you want resuscitative measures or life support. Clearly outlining your wishes will serve as your family’s guide rather than make hard decisions for you.

  • Familiarize With How Estate Taxes Work
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The estate taxes will be assessed once a person passes away, and it’s the tax paid by the estate. Generally, the taxes you’ll be paying will depend on the entire value of your estate. Remember that it’s your responsibility to pay if your estate goes beyond a certain level. 

As part of estate planning, you should make an effort to know how estate taxes work and ways to avoid or minimize the amount you’ll pay. Consider hiring the services of a legal professional specializing in taxes or a reputable estate planner to assist you in reducing the amount of taxes your estate will pay. Doing so will ensure the assets your beneficiaries will receive will not be less than what you intended in the first place.

  • Delegate A Person To Manage Your Digital Assets

Today, almost every individual has several online accounts, such as e-mails, social media platforms, online banking, and many more. Although most might not consider it a priority to know what happens to these digital assets if they pass away, consider getting everything in order. It would be best to list all your digital assets, login credentials, and passwords. Once you have everything listed down, hand the information to someone you trust to access your digital assets in case of your death and carry out your specific wishes. 

  • Arrange For Your Funeral

Over the years, funeral expenses have continued to increase. Depending on your specific funeral wishes, you have several cost considerations for the funeral service, such as the coffin or urn, venue, burial plot, flowers, and officiant, to name a few. 

If you don’t have life insurance or your family lacks the resources to cover a funeral, you need to plan and make funeral arrangements as soon as possible. Doing so will ensure you’ll have a decent burial and no longer burden your family with the funeral expenses.

  • Ensure Proper Storage Of Documents

Once all your estate plan documents are ready, the next consideration is proper storage. Remember that storing your documents is vital. Ideally, you should have several copies at different locations, such as a safety deposit box, with family members, or with your lawyer. Consider making several copies to ensure that all the information is tamper-proof, and you’ll never run out of sources when you need them most. Don’t forget to inform all pertinent family members and friends, especially the executor, of the location of your estate planning documents and how to access them when the time comes.

Final Thoughts

The estate planning process can be a challenging one but a crucial measure to give you and your family peace of mind. When everything is in order, you have the assurance of having all your wishes granted in the event of your death. Securing an estate plan will ease your burden while protecting your finances, cutting down on legal issues, and ensuring that your assets will be fairly distributed to your family in your untimely demise.

 

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