Some people leave estate planning up to the very last minute, which can cause problems for your family after your death. If you want to ensure they are protected, here’s what you need to do.
Estate planning may seem both morbid and tedious to some, which is the main reason why people don’t want to deal with it. However, the downsides of not planning your estate outweigh the efforts that you have to make to ensure your affairs are in order before you pass.
When you pass, your family will have to take care of all the legal matters you left undone in an emotionally painful time. Not only does this burden them emotionally and perhaps financially, but it can also spark conflict between the people that you leave behind.
If you want to leave your affairs in order and let your family grieve without having to handle legal matters, here are the necessary steps you need to take to plan your estate:
1. Determine your wishes
Before you get a probate attorney to draft your will, you must establish what you want to happen in the future. Who will make the decisions on your behalf if you’re no longer able? Who will take care of my kids before they turn 18? How will my estate be divided among my family? Will all my assets be liquidated upon my passing?
As you list down what you want to happen with your estate, make sure that you make your wishes clear to the people you will be leaving behind. It can be a difficult discussion, but it will give everyone a chance to state their opinions and ask questions.
2. Draft your will
No matter how little your financial assets are, a will can help your family tie up loose ends after you pass. With a will, you can ensure that all of your wishes are carried out, and your estate is used as intended.
3. Get a power of attorney
Assign a power of attorney to the person that you want to act on your behalf. A power of attorney can either be financial or medical. In a financial power of attorney, the appointed person will be able to handle your finances, wherein a medical power of attorney will let the person take care of all health-related matters.
A power of attorney is an inexpensive document, and while you’re drafting your will, ask your lawyer if they can throw it in for less.
4. Update beneficiaries
Ensure that all of your beneficiaries are correct across your insurance policies, 401(k), and retirement plans. Update your beneficiaries every few years or whenever there is a significant life event (e.g., death of a beneficiary, birth of a child, divorce, separation, etc). Otherwise, your money can go to the wrong person, even if you state who should receive it in your will.
5. Keep documents in a safe place
Keep your original documents with your lawyer or in a fire-proof container at home. You can store copies in a safety deposit box and keep digital copies on a secure cloud. Advise your trusted family members where they can find these documents after you pass.
Don’t want until you’re in your deathbed to take care of your estate. If you want to give your family one less thing to worry about, start planning your estate with these first few steps.