Five Estate Planning must haves
No one likes to think about death. Why spend time preparing for something you have no control over, right?
Not so fast.
Sure, we're powerless to control when our time comes.
But we can effect what happens to our assets after we’re gone.
Remember, death doesn’t just have an emotional toll on those we love, but a financial one as well. .
The keys to preparing for an unexpected passing, or illness, lie in making a viable plan that can be put into effect at anytime. And that’s where estate planning comes in.
Estate planning is the process making fiscal or legal arrangements in the case of your death or incapacitation. The more detailed your plan, the better off you leave the people you love.
Here are the top five estate planning must haves:
Keep in mind that these tips are just a starting point. There are plenty of other measures you can take to protect your assets.
When it comes to estate planning there’s no such thing as over planning. Your loved ones will need whatever help they can get, and you’re the only one with the power to ensure they get it.
1. Have a will in place
In simple terms, a will defines your last wishes. These include matters such as legal guardianship of children, how assets are to be dispersed, and any special instructions on caring for an aging parent or child with special needs.
A will provides a probate court a guide on how to proceed with some of the most critical issues. These courts oversee the handling of a person’s estate after their death,
Without a will, your estate will be handled based on the laws of the state you reside in.
Although this can work well for some people, for others it can mean that some issues, or loved ones, are overlooked.
While a last will and testament is the cornerstone of an estate plan, and the surest of the five estate planning must haves, estate planning can expand beyond this legal document.
2. Obtain a Power of Attorney
Among the five estate planning must haves, a power of attorney is almost as crucial as a will.
A power of attorney gives someone the right to speak and act on your behalf if you're deemed unfit to do so on your own.
In this legal document, you elect the person who will act on your behalf. This person has the right to make financial, legal, and medical decisions for you.
Without this kind of a document, once again the state can step in.
In most cases the state will appoint a close relative.
However, a power of attorney ensures that someone you trust will be making decisions for your.
What’s more, in the event that you’re incapacitated, and can’t speak for yourself, it’s important to have a detailed list of dos and don’ts that medical staff (and family or friends) can refer to.
So elect someone who knows you well, knows your wishes, and can carry them out fully. That way, you ensure that you receive the medical attention you desire.
3. Purchase life insurance
Another way that you can protect your assets after your gone is by investing in a life insurance plan .
With a variety of plans to choose from, life insurance can protect your family from financial distress after your death.
Although they can be overlooked, current debts can accumulate after death, becoming the most financially debilitating results of a love one’s passing.
In some cases, family members are forced to liquidate assets to pay for these types of expenses.
Of the five estate planning must haves, this is the most direct way you protect estate. By providing your family with a good policy they can depend on, you give them the financial support needed to maintain your legacy.
4. Name your beneficiary
Something that can hold people back after the death of a loved one is having bank accounts or retirement funds held up in probate court.
There’s a way to get around probate court when it comes to the funds in your accounts, however.
Filing beneficiary forms makes the amounts in your personal accounts available to the person you've selected.
This way, the money your family might depend on doesn’t get tied up in the hassle of court.
5. Name a successor to your business or plan a buyout agreement
Unless you take the necessary precautions, there’s a good chance that once you’re six feet under your business just might topple.
With no upper management, who is supposed to run your company?
If you want to preserve what you’ve worked hard to achieve, it’s crucial to develop a plan of succession. If you don't have a successor in mind, make arrangements for future ownership of the company.
You may be powerless to control your own death, but you can be proactive and empowered about the financial and legal future of you family after your gone.
Although death might not seem eminent, don’t wait until it is. Make the necessary arrangements now so that you can rest in peace (quite literally).
These five estate planning must haves will definitely leave your loved ones better off than if you had done nothing at all. But, there are plenty of other actions that can ensure your assets end up the right hands as quickly as possible.
Other crucial arrangements include establishing a living trust, creating a living will (also known as a Health Care declaration), and even keeping copies of important documents somewhere accessible to your attorney, or those closest to you.
Do more work you do to solve these matters now, and you'll be at ease should anything ever happen.