There is a common misconception that estate planning is only reserved for rich people with many valuable assets. The truth is that estate planning is appropriate for anyone with any number of assets, even minor ones with little to no monetary value.
Don’t wait until you’re old to create a last will and testament for your estate. We’d all like to assume that we’ll die in old age, but sometimes accidental deaths happen unexpectedly. That is why younger people with assets should consider planning their estate early in case something terrible happens that renders them dead or incapacitated.
Below are the top 11 considerations to make when planning your estate distribution details.
1) Bundle All Your Critical Documents Together
Gather together your most sensitive financial and personal documents, such as your marriage certificate, birth certificate, vehicle titles, real estate deeds, life insurance policies, etc. Also, gather the names and phone numbers of your primary care physician, attorney, insurance broker, and other vital people your loved ones will need to contact upon your death or incapacitation.
Keeping these documents together will make planning your estate much easier.
2) Create a Last Will and Testament
Every estate plan must include a last will and testament because it is the document that outlines who will get each of your assets after you die. If you don’t create a will or trust before you die, your loved ones will have to go to probate court to try and retrieve your assets. This can be a lengthy and costly process without any guarantee of how the probate court will decide to distribute your assets upon your death.
It is easy to create a will. As the testator, you must name someone to be the estate executor of the will. This is the person who will manage the distribution of your assets upon your death. For this reason, make sure it is someone you trust.
3) Create a Living Will
A living will is different from a last will and testament because it doesn’t involve the distribution of assets upon your death. Instead, it establishes a directive regarding which medical treatments you should receive if you become incapacitated. That way, no one else can make these decisions for you.
4) Designate a Power of Attorney
A power of attorney gets to make financial decisions on your behalf in the event of your incapacitation. So make sure you choose somebody as your power of attorney you can trust with your finances.
You can also set a health care power of attorney if you have set up a living will. This power of attorney verifies that the medical treatment preferences outlined in your living will are getting executed.
5) Create a Living Trust
A living trust helps get your assets distributed faster to your beneficiaries upon your death. You can also use a living trust to keep your financial affairs discrete. Then your loved ones and beneficiaries won’t have to go to probate court to fight for your assets.
You are the designated grantor of your living trust, which means you have total control over the assets in the trust until you die. After that, the trustee you’ve selected will control the trust and be in charge of distributing the assets to your beneficiaries. The trustee is obligated to follow your specific distribution instructions.
6) Change Your Beneficiaries When Needed
Family situations change all the time. Perhaps you got married to someone or had a couple of kids since the last time you established your life insurance policy or retirement account. In these situations, you’ll want to update the beneficiaries on these documents to ensure they include the additional members of your family. Likewise, if you’ve divorced or lost a child, you can also remove beneficiaries from the documents.
Updating your beneficiaries will ensure the right people get your assets upon death.
7) Choose a Digital Asset Designee
Who do you want to handle your social media accounts after you die? Think about designating a person you trust to take over your Facebook, Twitter, website, and other digital accounts upon your death. In fact, Facebook has specific settings which allow you to designate someone right on your online account.
8) Plan Your Post-Death Arrangements
Your estate plan should include funeral plans, such as where you’ll get buried and how the funeral costs will get paid. People like to choose pay-on-death bank accounts to cover the costs of their funeral expenses. Perhaps that is a suitable option for you too.
9) Save Copies of All the Documents in Your Estate Plan
Make copies of all the documents in your estate plan, such as life insurance policies, living trusts, last will & testament, etc. Keep these documents stored in a safe deposit box or another safe hiding place in your home. Now, tell someone you trust about this hiding place or safe deposit box and its documents. That way, they can gather these documents and use them to help distribute your assets upon your death.
10) Have a Conversation with Your Friends and Family Members
Establishing your estate plan is necessary because it documents your preferences regarding asset distribution and healthcare decisions upon death or incapacitation. However, you still need to have a conversation with your loved ones about your estate plan and the intentions you have for it. Then no one will question the wishes you outlined in your estate plan.
11) Periodically Review Your Estate Plan
Don’t store your estate planning documents somewhere, and then never look at them again. Instead, make it a habit to periodically review your estate planning documents to ensure you still agree with the intentions outlined.
If you have questions about these estate planning considerations, please consult with an estate planning attorney.
You can contact Alfano Law Office by calling (603) 856-8411 or at this link.