5 min read
Use these estate planning tips to make sure your assets go where you want them to once you pass on.
Aretha Franklin left behind a legendary legacy and an estate worth an estimated $80 million.
At first, no one could find Franklin’s will after pancreatic cancer claimed her life in 2018. Then, three wills supposedly written by Franklin were discovered under couch cushions. Her heirs went to court to untangle the complicated estate.
It's difficult enough to lose a loved one without adding legal battles to the mix. That's why estate planning is a great final gift to those you love.
What Is Your Estate?
Your estate is everything you own, including your:
- Bank accounts
- Collection of Disney souvenir plates (yes, even these!)
Estate planning makes it easier for your loved ones to put your affairs in order.
10 Estate Planning Tips
1. Start Now (if you haven't already)
You won’t find any doom and gloom here, but you really don't know when your time on earth will end. You might need to change your perspective to view this as a positive rather than a negative.
When you start estate planning now, you don’t have to worry about tomorrow as much. You control the situation. If something unexpected happens, you’ll be one step closer to putting your loved ones in a better position.
Of course, you’ll need to document the details as you go along.
2. Write a Will
Do you want to start a will by yourself?
Your will could cost anywhere from a few hundred dollars to several thousand dollars if you turn to a legal professional. It all depends on how complicated your estate is.
Even if you don’t reach out to a lawyer, a do-it-yourself will is better than nothing at all. Just make sure the document includes your signature and the signatures of two disinterested witnesses. “Disinterested” witnesses don’t benefit from the will.
Why do you need these signatures? Several states don’t accept “holographic” wills that are written and signed by a single person with no witnesses.
3. Choose an Executor
The executor of your estate carries out the wishes specified in your will, in addition to:
- Taking care of ongoing bills (such as a mortgage)
- Notifying banks and credit card companies
- Paying taxes
- Tying up loose ends
In most cases, the executor is a close family member.
4. Consider Life Insurance
Have you thought about buying life insurance?
It can do so much after you’re gone, including:
- Leaving enough money for your loved ones to pay bills
- Funding a trust
- Creating a gift for charity
- Covering your final expenses like cremation or burial
5. Remember That a Will Is Valid Before You Pass Away
Estate planning tips usually focus on what happens after your death. But if you’re reading this, you’re very much alive!
Make sure your estate plan gives someone the power of attorney for financial and legal matters while you’re living. It’s something you hate to think about, but an accident or illness could leave you without the ability to make decisions for yourself.
Power of attorney gives someone a wide range of legal rights, including handling your financial and medical affairs.
6. Pre-plan Your Funeral
Pre-planning your funeral gives you the chance to sort out a lot of details, including:
- What you want to include in your obituary
- Whether you want to be buried or cremated
- What kind of visitation, funeral, or celebration of life you want
- How to fund your funeral in advance
Above all else, pre-planning your funeral gives you the chance to create the send-off you want.
7. Put Your Assets in a Trust
Contact a lawyer to set up a trust.
A revocable living trust lets you pass your property directly to your heirs without worrying about the probate process. Probate is the legal verification of your will, and it can drag on in complicated situations.
8. Review Your Estate Plan Regularly
You’re way ahead of the game if you have an estate plan in place.
But life changes with marriages, divorces, deaths, births, and real estate transactions. That’s why you should review your will, retirement funds, and life insurance policies at least once every year.
A judge might make a decision for you when you don’t specify a request in a will. That may not end up the way you or your family want it to.
9. Write It All Down. Again.
Write an informal letter to your spouse, children, and any other beneficiaries describing your will.
Include important information such as:
- Your lawyer’s phone number and email address
- Where you have accounts, investments, and insurance policies
- Professional contacts
10. Talk About It
Share your plan with family members so you don’t overlook anything or anyone. Some parts of your estate may have more sentimental value than monetary value. You might not know what your loved ones want to keep.
These estate planning tips will help you get a good start. Because state laws and individual circumstances vary so much, you might want to consult an estate planning lawyer.
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