Where to begin with estate planning

Estate planning is an important task that can help ensure your loved ones are taken care of and your assets are protected after you pass away. In this post, we’ll provide tips and advice to help you get started.

1. Understand what an estate plan is

An estate plan is a set of legal documents that outline how you want your assets to be distributed after you pass away. It also includes instructions for how you want to be cared for if you become incapacitated and unable to make decisions for yourself. The goal of an estate plan is to ensure your wishes are carried out and to make the process as smooth as possible for your loved ones.

Watch this video of our Addio Expert and estate attorney, Chris Jeter, explain what an estate plan is.

2. Take inventory of your assets and debts

The first step in estate planning is to take inventory of your assets and debts. This includes everything from your bank accounts and investments to your personal property and real estate. Make a list of everything you own and owe, including account numbers and contact information for financial institutions.

3. Decide who you want to inherit your assets

Next, you’ll need to decide who you want to inherit your assets. This can include family members, friends, or charities. You’ll also need to decide how you want your assets distributed. You can leave specific assets to specific people or divide your assets equally among your heirs.

4. Choose an executor and trustee

An executor is responsible for managing your estate after you pass away. This includes paying off debts, distributing assets, and following your wishes as outlined in your will. A trustee is responsible for managing any trusts you’ve set up for your beneficiaries.

When choosing an executor and trustee, consider someone who is responsible, trustworthy, and able to handle the duties involved. It’s also important to have a backup executor and trustee in case your first choice is unable or unwilling to serve.

5. Write a will

Once you’ve taken inventory of your assets, decided who you want to inherit them, and chosen an executor and trustee, it’s time to write a will. A will is a legal document that outlines how you want your assets distributed after you pass away. It’s important to work with an attorney to ensure your will is legally valid and accurately reflects your wishes.

In your will, you can also name a guardian for any minor children you have. This ensures that someone you trust will take care of your children if something happens to you.

6. Consider a trust

In addition to a will, you may want to consider setting up a trust. A trust can help you avoid probate and ensure your assets are distributed according to your wishes. There are several different types of trusts, so it’s important to work with an attorney to determine which type is right for you.

Some common types of trusts include revocable trusts, which can be changed or revoked during your lifetime, and irrevocable trusts, which cannot be changed or revoked once they’re established. A trust can also provide tax benefits and protection from creditors.

7. Name beneficiaries

You’ll also need to name beneficiaries for any retirement accounts or life insurance policies you have. These assets don’t pass through your will, so it’s important to make sure your beneficiary designations are up to date and accurately reflect your wishes.

8. Plan for incapacity

In addition to planning for your passing, it’s also important to plan for incapacity. This means making sure someone you trust has the legal authority to make decisions on your behalf if you become unable to do so.

There are several documents you can use to plan for incapacity, including a durable power of attorney, which gives someone the authority to make financial decisions on your behalf, and a healthcare power of attorney, which gives someone the authority to make medical decisions on your behalf. You may also want to consider a living will, which outlines your wishes for end-of-life care.

9. Review and update your estate plan regularly

Once you’ve created your estate plan, it’s important to review and update it regularly. Life changes, and your estate plan should reflect those changes. Review your estate plan at least once a year and make updates as necessary. This includes updating beneficiary designations, reviewing your will and trust, and updating your powers of attorney.

Creating an estate plan is an important task that can help ensure your loved ones are taken care of and your assets are protected. By following these tips, you can create an estate plan that reflects your wishes and provides peace of mind for you and your family.