Although sometimes people may put off estate planning, it is important and should be done sooner rather than later to protect your family. There are several aspects to an estate plan and every plan is unique to the individual and family. Here are some common things to accomplish in an estate plan:
- Make a will.
A will sets forth who will inherit your property and care for your young children.
- Consider a trust.
If you hold property in a living trust, your survivors will not have to go through probate.
- Make health care directives.
Health care directives include a “living will” and a power of attorney for health care, which gives someone you choose the power to make health care decisions for you decisions if you can not.
- Make a financial power of attorney.
With a durable power of attorney for finances, you can choose who will handle your finances and property if you become incapacitated and unable to handle your own affairs.
- Protect your children’s property.
You should name an adult to manage money and property that your minor children inherit from you.
- File beneficiary forms.
Naming a beneficiary for bank accounts and retirement plans makes the account automatically “payable on death” to your beneficiary and allows the funds to skip the probate process.
- Consider life insurance.
If you have young children or own a house or if you owe estate tax when you die, life insurance may be appropriate.
- Consider estate taxes.
For deaths in 2016, the federal government will impose estate tax at your death only if your taxable estate is worth more than $5.45 million.
- Cover funeral expenses.
You can set up a prepaid funeral plan or payable-on-death account and deposit funds into it to pay for a funeral and related expenses.
- Make final arrangements.
Let your executor know your wishes regarding organ and body donation and disposition of your body as well as other matters. You can do this formally in a written letter to your executor.
- Protect your business.
You should have a succession plan.
- Store your documents pertaining to all above.
Consult with an experienced estate planning attorney to create a customized plan for your estate planning situation.