Effective estate planning makes sure the assets in your estate are distributed based on your wishes once you die. States have certain considerations and laws that must be followed when creating an estate plan. An estate planning attorney at The Ebbert Law Firm can walk you through these considerations and ensure you comply with state and federal regulations. The attorney can guide you through the major steps to protect your legacy and provide you and your family members with peace of mind.
But before you start with estate planning, define your goals first. Whether you want to provide for your loved ones, reduce taxes, or support your chosen charities, consider what is most important to you. Think about your current financial situation, expected needs in the future, and the legacy you will leave behind. Once you are ready to craft an estate plan, here are steps you must take:
Draft a Will
You will is your estate plan’s foundation. Before you decide who will inherit your assets, create a list of all assets and liabilities in your name. These can include vehicles, real estate deeds, savings and checking accounts, student loans, credit cards, insurance policies, retirement accounts, and investment accounts. Ensure your will specifies how your assets will be distributed. Also, you must appoint a personal representative to carry out your will’s provisions and distribute assets to beneficiaries. If your children are still minor, pick somebody you trust who will raise them and manage their inheritances.
Set Up a Living Will and Designate a Healthcare Proxy
Both documents make sure that your healthcare wishes are carried out during critical situations. A living will states your preferred medical treatment when incapacity arises. It also spells out your wishes in terms of organ donation and life-sustaining measures. Meanwhile, a healthcare proxy authorizes your chosen individual to make healthcare decisions for you.
Establish a Financial Power of Attorney
This legal document dictates who will pay your bills, purchase and sell property, and handle your financial affairs. A person you trust can be appointed to supervise your finances during incapacity. Make sure to specify the extent of this person’s authority and responsibility.
Set Up a Revocable Living Trust
When you establish a trust, you put assets into it during your lifetime. When you become incapacitated or die, a successor trustee will take over, handling and distributing your assets to beneficiaries without going through the probate process. A revocable living trust offers privacy, avoids the delays and costs of probate, and ensures your assets are managed seamlessly. When you set up this trust, decide which assets to put in it. Name a trustee who will handle the assets in the trust and distribute them based on your wishes. Consult with a lawyer to execute the trust document. Fund the trust properly.
Think About Your Business
If you are running a business, have measures in place to guarantee a smooth transition without ruining the stability of your company. When creating an estate plan that involves a business, determine what, when, who, and how business assets must be transferred to your heirs. Create a plan that aligns with the legal structure of your business. Determine the business’s value and explore how to fund the transfer or buyout. Also, decide on your successors and establish a succession planning timeline. Make sure your stakeholders are properly informed about this plan.
Organize Vital Documents
Make a comprehensive file that contains your deeds, wills, trusts, and insurance policies. Label folders and sections clearly. Keep your file in a secure place that you can easily access. Communicate the location and existence of such documents to your trusted loved ones.