Do you want to create a sound financial and legal framework for your family? If yes, estate planning is essential for ensuring your assets are managed and passed on in the most organized and efficient way possible. By taking a few simple steps, you can rest assured that your wishes and legacy will be safe and secured. Read on to learn how to make secure estate plans in 7 simple steps.
1. Preparing Yourself for a Secure Estate Plan
Having an estate plan in place is one of the most important steps you can take in secure your financial future. But before you do, you’ll want to take the time to make sure you’re informed and ready for the planning process.
Below are some important tips to help you prepare for a secure estate plan:
- Consult a Financial Advisor – Before getting started, it’s always a good idea to consult your financial advisor to discuss your goals and make sure your plan is tailored to your needs.
- Clearly Define Your Goals – What’s really important to you? Do you have a dream home you’d like to be able to afford? Do you want to purchase health insurance? Are you funding any philanthropic causes? Understanding your financial goals and objectives will help you create a plan that works for you.
- Gather Necessary Documentation – Prepare your documents. Gather important records such as birth certificates, marriage and death certificates, documents for any financial accounts, records of any real estate holdings, and a list of names and contact information for beneficiaries.
An estate plan may seem daunting, but it doesn’t have to be. With the right amount of preparation, you can create a plan that works for you and helps you achieve your financial goals.
2. Identifying the Key Elements of a Secure Estate Plan
Creating a secure estate plan is one of the most important steps to ensure the well-being of your loved ones and your personal assets. While the process can be a bit overwhelming, understanding the most fundamental components of estate planning is a great place to start.
Estate planning may include some or all of the following:
- Will– A will is a legally binding document that details your specific preferences related to how you want your assets to be distributed after death. This document will also allow you to name guardians for minor children.
- Living trust– This is a legal document, similar to a will, that allows you to transfer your real estate and other assets to someone else without going through probate court. It also allows you to set up rules for how the assets are to be used.
- Power of attorney– This document selects a trusted individual to handle tasks related to your financial and medical needs if you become unable to take care of them yourself. It can grant specified powers to make decisions on your behalf.
- Health care proxy– This document selects a trusted individual to make medical decisions on your behalf if you become incapacitated and can no longer express your wishes.
By taking the time to familiarize yourself with the key elements of estate planning, you can provide more peace of mind to your loved ones.
3. Determining Your Asset Values and Allocating Your Assets
Once you understand your assets, the next step is to determine their value. This can be an eye-opening exercise, because sometimes the value of assets we prioritize or take for granted is higher than expected. Nevertheless, it’s worth noting both how much is due for each asset, and whether its current value is higher or lower than the amount invested.
What comes next is deciding how to allocate your assets. This may require you to lend some to a business, finance your college education, or simply save it.Whatever the goal, it’s essential to figure out which combination of assets will work best. It is recommended to have a financial advisor assist you in making strategic decisions.
- Determine the value of your assets
- Decide how to allocate assets
- Consider consulting a financial advisor
4. Establishing Your Beneficiaries and Executors
Once you have thought through your estate planning wishes and you start writing them into your will, you’ll need to consider who your beneficiaries and executors should be. Beneficiaries are individuals and organizations who inherit money, property and other assets from your estate, while executors are charged with enacting the provisions of your will.
When it comes to beneficiaries, you have a few different groups you should consider:
- Family: Your immediate family – including your spouse, children, and parents – are often the first people you think of when deciding who to leave property and assets to.
- Commonly Excluded Parties: Current and former spouses may be excluded from receiving anything from your estate in some cases. It’s important to seek legal advice if you wish to change this in your will.
- Charities: Many people opt to donate a part of their estate to their favorite charities. It’s possible to provide a stipend directly or set up a trust fund.
When it comes to deciding on an executor, you may look to a family member or a friend you trust to carry out your wishes. An estate planning attorney can also serve as an executor. Depending on the size of your estate and the complexity of your will, you may even appoint multiple executors.
Creating an estate plan might feel like an intimidating task, but hopefully this article has showed you it doesn’t have to be. By following these 7 simple steps, you can make sure your wishes are fulfilled and your property is protected. Don’t wait until it’s too late– start planning your estate today!