An estate plan isn’t just for the wealthy. It provides more detailed instructions than a will on how assets (any property owned, money, possessions, etc.) and end-of-life wishes (such as a life-altering health event or sudden death) should be handled.  One way to honor your familial relationships is to establish an estate plan.

Developing an estate plan, and keeping it up to date, is important for many reasons. With an estate plan, you can fulfill these seven goals:

  1. Take care of your dependents

In the event of a sudden death, an estate plan can make sure any dependents are taken care of and your desired guardian will assume responsibility for them. If you don’t choose a guardian, a judge will choose one for you.

  1. Decide the person you want to be in charge

You’ll need someone to make decisions for you in the event that you’re unable to make decisions for yourself, such as if you have a severe stroke or accident. Your estate plan should clearly state who has power of attorney for healthcare and financial decisions.

You should also choose an executor of your will to make sure all of your wishes are met. This person can also help to make any decisions that aren’t specifically outlined in your will, such as how to divide up your possessions.

  1. Communicate medical decisions

Like choosing a power of attorney, a living will is designed to communicate your wishes regarding major medical treatments and decisions in the event that you cannot communicate your wishes. This document will help family members and medical professionals and save them from stressful indecision on how best to proceed with long-term care or major treatments.

  1. Update your beneficiaries

Any financial accounts and policies — such as retirement savings accounts and insurance policies — with named beneficiaries will distribute money to those beneficiaries, regardless of what your will or estate plan may say. Make sure that your beneficiaries remain up to date and that they remain in line with the wishes in your estate plan, especially after a birth, marriage, or other major life change.

  1. Establish a trust

With a trust, you’ll have total control over who gets what, how much, and when. These assets can be distributed during your lifetime or after your death. And if you set up an irrevocable trust, the assets in the trust will not be subject to estate taxes.

  1. Avoid local probate

Without a plan in place, a local probate court may decide how to divide up your assets — a process that’s often expensive and lengthy — and your assets may be left to unintended recipients. In this case, all of your assets will be known to the public. However, be sure to check local probate laws with your attorney.

  1. Plan for taxes and fees

Attorneys and financial advisors can help you prepare for any federal and state taxes, or fees, that you may owe after your death. For example, certain assets may need to be sold to cover these fees. Advisors may also help you to reduce how much you’ll owe, too.

An Estate Plan Will Take Care of Your Family

An estate plan will make sure that your family knows what to do — and that they’re taken care of. Having a thorough estate plan in place can save your family a lot of stress and decision-making during an already stressful time. You’ll have done the hard work for them. They won’t need to decide how to handle major medical treatments or how to divide up your assets because your end-of-life wishes will be known and carried out according to your instructions.

 

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