What is estate planning? Estate planning is a process that involves making decisions about the distribution of your property and assets after you die. It’s a very important process that requires careful consideration, especially if you have dependents or family members who rely on you for financial support.
If you want to protect yourself and your loved ones, then it’s essential to master the art of estate planning checklist with these eight tips:
1) Know Your Legal Options
The first thing you need to do when you’re learning about estate planning is to know all of your legal options. This means knowing what kind of documents you can create and what kind of documents you must create in order to protect yourself and your loved ones.
For example, if you want to leave everything to one particular person or entity (such as an animal shelter or charity), then it’s essential that you have an appropriate document created by an attorney who specializes in this type of law. This will ensure that your wishes are carried out exactly as stated and nothing is left up to interpretation.
2. Choose Your Executor Wisely.
Your executor is responsible for carrying out your wishes regarding the management of your estate after death. That includes making sure all debts are paid, all taxes are filed, and any bills get paid in a timely manner.
In addition, the executor will manage any remaining assets until they can be distributed according to your wishes. As such, it’s extremely important that you choose someone who is capable of handling all of these tasks accurately and efficiently.
3. Update Your Documents Regularly
It’s important that you update your will whenever there is a significant change in your circumstances — such as marriage or divorce or if one of your beneficiaries passes away and leaves behind dependents who need support from the estate.
You should also update the document if you move to another state or if there are any other significant changes in your life circumstances (such as having children).
4. Make Sure Your Will Covers All Contingencies
You may not think much about your will until you actually need to use it. However, it’s vital that you make sure your will covers every contingency possible so that no matter what happens, your wishes are carried out correctly. Some common examples include:
- If you don’t own a home at the time of your death, then your home goes to your spouse or children.
- If you don’t have any children, then your estate goes to your parents or siblings.
- If you have more than one child, then each gets his or her share of the estate based on their age.
5. Create Trust For Minor Children
A trust is a legal arrangement that allows you to set aside money for your children without giving them full ownership rights over the funds.
Trusts are often used to provide ongoing support for children who aren’t yet old enough to handle their own finances. They can also be used to help pay for college expenses, cover medical costs, and provide for special needs.
6. Consider Creating A Living Trust
A living trust is similar to a traditional trust but differs in that it gives you control over how the money within the trust is spent.
The corporate trustee helps complete authority over the distribution of the trust’s assets, he or she can decide whether to spend the money on things like education, health care, or retirement.
A living trust can also be revoked at any time, which makes it ideal for people who plan to marry again or remarry.
7. Have A Backup Plan
If something were to happen to you, your family would likely need to quickly come together to figure out how to distribute your estate. It’s important that you have a backup plan in place in case your original plans fail.
One option is to create an irrevocable life insurance policy with a beneficiary designation form attached. This way, your heirs won’t need to go through probate court when distributing your estate.
8. Check Your Beneficiary Designations
If you’re married, you’ll want to check your beneficiary designations to ensure that everything is correct.
For example, if you name your wife as your primary beneficiary, then she will receive your entire estate upon your passing. But if you leave your estate to your children instead, they will only get half of your estate.
Final Words
Estate planning or legacy planning isn’t always fun, but it’s essential to make sure that your loved ones are taken care of after you pass away.
By following these tips, you can avoid costly mistakes and ensure that your estate is distributed according to your wishes.