Estate planning is a simple endeavor for those who have known nothing but riches their entire lives. Some of us have worked for every penny we have, which can sometimes make estate planning seem like a way to capitalize on a lifetime’s worth of toil so that our beneficiaries can live easier in the future. Still, it can be a depressing process because few people want to consider a world that does not include yours truly. But it is necessary.
These are a few steps you will want to take in order to see the best outcome for your beneficiaries.
- Speak with beneficiaries. This might result in a few awkward conversations, but you may not want to surprise beneficiaries with an inheritance. Ensure that someone knows what you have and where you want it to go in order to reduce the chance that someone will contest your estate plan; doing so might kick the entire affair over to probate court, in which case a judge will have the ultimate decision-making power.
- Write A Last Will & Testament. This can be done electronically (online) without a lawyer present, but you may want to sit down with someone for a free consult in order to make sure you do not make any mistakes. Make a simple list of big ticket purchases like vehicles or homes before moving on to smaller, more sentimental items and trinkets that you may want to leave your friends and family. Don’t forget to include any investments or bank accounts when considering your assets. All these should be included in the legal document, and it should be updated whenever you procure new assets or lose old ones.
- Execution and Power of Attorney. When you’re done drafting a will, start thinking about who you trust enough to execute your wishes. This can be a close friend or family member, or even a trusted financial advisor or attorney. This is the person who will make sure your assets are distributed according to your wishes. The same individual might make a good Power of Attorney, or you might wish to let someone else handle the responsibility. This person will make decisions for you when you cannot make them for yourself — such as when you are physically or mentally impaired because of old age or after an accident.
- Trusts. Creating a trust for each beneficiary is one of the best moves you can make to determine where your assets go and whether or not they can be used. You might make an inheritance available to a grandchild for college — or bar that inheritance from being used in the event the grandchild opts to forego continuing education. With trusts, it doesn’t matter if you are still alive. The trust will kick in according to the conditions you set.