Estate planning is really more about making decisions and being organized than it is anything else. Once you undertake the process decisions need to be made and once that is decided obtain the plan and materials necessary becomes a simple process. Here are a few things to be aware of and a list of items to consider.
Make and execute a will:
A will is merely directions left by you for how, when and where you want your assets transferred after your death. Your will call also include special instructions regarding your “personal” goals. It can also leave instruction for minor children and the naming of a guardian.
Revocable living trusts:
It may make sense to consider the use of a trust if you own real estate or other assets that would need a new title or deed. Trusts can help avoid the need of probate and often can reduce costs.
Health care directives:
These directives will allow your heirs and caretakers to fully understand your wishes in regards to assets and end of life care. The term “living will” is often used as a health care directive as can “power of attorney.” A general “power of attorney” is often to allow a trusted person to conduct and maintain your financial estate.
Assets that avoid probate:
Anything that a beneficiary can be named to can avoid probate. These can include bank accounts, stock brokerage accounts, life insurance, annuities and retirement accounts such as an IRA.
Calculate estate taxes and probate costs.
Many estates will be liable for estates taxes (death taxes) and this may result in needing to liquidate assets to comply with the liability. Make certain you fully understand these potential liabilities. Often life insurance is used to provide liquidity to solve the problem.
Many people pre-pay estate taxes and leave behind specific instruction for a final service. These instructions are often hand written and a nice place to keep them is with your will. It is a good idea to inform a child or a close friend of their existence.
Your health directives and your power of attorney should be kept safe and trusted friends or children should know their location. Other items to keep safe could be deeds, brokerage account information, IRA information, funeral plans, general financial information and tax returns.
Like all important life decisions, always make certain you fully understand how things work and what affect estate planning decisions can make on your assets and your goals. Always seek professional advice.