Have you ever considered what will happen to your assets when you pass away? Creating an estate plan is the best way to ensure everything goes where you want it to go. You’ll need to be methodical about how you tackle this process, though.
Read on to discover five things you need to know about estate planning!
1. Get the Right Documents
As part of your estate planning efforts, you’ll need to have a few main documents. These documents include a trust and power of attorney.
With a trust, you’ll be able to make specific allocations for your assets. You can modify some types of trusts, like revocable living trusts, any time before your death. And you can make a charitable trust to allocate some of your money or assets to specific organizations.
A trust company, like Nevada Trust Company, will oversee the disbursement of your assets to the people you’ve designated. With power of attorney, you’ll designate a specific person to make decisions for you regarding assets.
2. Consider Dependents
When you’re planning where your assets will go, consider where your dependents will go. If you have children, you owe it to them to give this a strong consideration. This means you’ll need to name a guardian and potentially a backup guardian.
You don’t want to do this without notifying the potential guardian first, however. You’ll want them to agree to take on this responsibility. Without appointing a guardian, your dependents will be at the mercy of what a probate court determines.
3. Know Your Debts
It’s wise to write down your debts as part of the estate planning process. This can include things like mortgages or credit cards. It also could include car loans and educational loans.
Compile all information, such as account numbers and details about the loan source. You can put these into a digital file, but it’s wise to maintain a hard copy, as well. Keeping this information in a logical place will make it easier on those attending to your debts.
4. Don’t Forget About Taxes
Keep in mind that what you own comes with taxes, and someone will be responsible for those after your death. For instance, property or inheritance will come with estate taxes.
Working with an estate lawyer is the best way to help minimize these taxes. This could include gifting your family assets instead.
5. Update Your Beneficiaries
One of the most helpful gestures you can make is to keep everyone affected in the loop about your plan. That way, they can know what to expect.
For instance, you may have life insurance policies that go to people who might not be named in a will. Likewise, you’ll have beneficiaries for retirement or bank accounts. Any time you make a decision or change, let those impacted know.
Learn About Estate Planning
Estate planning is a critical process if you want to control where your assets go. Make lists of all debts and financial accounts, and determine your beneficiaries. Additionally, consider your dependents and tax situation as you make plans.
