27th Aug 2014
Estate planning can seem like an overwhelming chore. In addition to being emotionally draining, there is a bit of research that needs to be done in order to ensure that your estate is set up according to your specifications. If you have decided that you are ready to start with your estate planning there are five essential steps that you should use to get things in order.
Start the Process Early
It is always better to start estate planning early. This gives you plenty of time to do the research you need and determine how you would like to manage your affairs. These tasks are much easier to manage when you are not dealing with the emotional toll that these conversations can have. If you are dealing with the difficult emotions associated with managing an illness or life-threatening situation you will not be in the proper mental state to address the legal responsibilities of estate planning.
If your estate planning is completed early, this will also offer peace of mind. Knowing that your will is filed helps to ensure that it will be readily accessible whenever it is needed. You never want to put yourself in a situation where you need to wonder if your family would be taken care of if something happened to you. If you have caught yourself wondering whether or not you need a will, it’s time to start your research and planning.
Find a Qualified and Trustworthy Attorney
You will be talking about a great deal of personal information with your estate attorney so you need to pick someone you are comfortable with. You want to feel as though your lawyer listens to you and works to understand your needs instead of offering you a formulaic estate package they use for each of their clients. You want to ensure that your lawyer will address issues regarding your estate that you may not have thought of.
Working with an established firm could be helpful for those starting early on their estate planning. You will continue to rely on your estate attorney for many years as you continue to update your legal documents. Most feel more comfortable knowing that the same team will continue to look over your estate throughout your lifetime instead.
Designate Guardians for Your Children
If your children are under aged you will need to determine who would care for them if something happens to you. This can be a very emotional decision and should not be taken lightly. Consider who could be trusted both to provide care for your children and would responsibly manage your estate. Given the level of responsibility associated with being an official guardian for your children, it’s important to talk about this with the individuals you intended to fill these roles before you establish the legalities of this arrangement.
Be sure to set a backup set of guardians for your children as well. This way if your original choices are unable to take on the responsibility for any reason there will be no debate regarding how to manage your affairs. You also want to keep your list of guardians up to date. If the guardians you had chosen are facing financial hardship, had another child, moved away or simply do not have the relationship with you that they once did you should replace them with someone more appropriate. It’s better to make the necessary preparations for your children instead of wondering if they would be taken care of should something happen.
Designate Your Beneficiaries
Your beneficiaries are the individuals that will inherit your estate when you pass away. There are no restrictions on who you can designate to be your beneficiaries, or how many beneficiaries you can have. You can also list organizations like a charity as a beneficiary. Your lawyer will establish what portion of your estate they are entitled to, based on your wishes and the number of beneficiaries that you have specified. Like guardians for your children, you will also need to designate backup guardians should these individuals pass away before you.
Speak to your lawyer if you need to designate beneficiaries for specialized assets such as a 401k, your vehicle or property. Some lawyers will fill out and file the necessary paperwork to establish these beneficiaries while others do not perform this service. It will typically cost an additional fee if you would like your lawyer to establish your beneficiaries for you, but if you are not comfortable performing this task yourself it will be well worth the extra expense. In many cases this can be updated by signing off on a confirmation of your wishes.
Upgrade Your Estate Documents Regularly
You should check in regularly with your lawyer even after your estate planning documents have been completed. This way you can make any necessary changes that might affect the life of your estate.
· Removing guardians for adult children
· Adding a new beneficiary when you are married
· Adding new beneficiaries after having or adopting a child
· Removing a beneficiary after a death or divorce
· Adding new assets to a trust
· Establishing power of attorney
· Updating documents to conform to new laws
· Updating addresses, names or other essential information about designated parties in your will
· Renewing or purchasing life insurance
· Document a plan to pay off your debts
· Pre-pay your funeral
If your will is out of date your assets might not be dispersed the way you intended. Having an out of date will also increases the need for your beneficiaries to go through the probate process to establish how your estate should be inherited. If there is an argument about the contents of your will the probate process could take months to complete, costing your beneficiaries hundreds in legal fees.
Starting the estate planning process early will help you ensure that you do not miss key steps that are necessary to prepare your assets, ensuring that the process of dividing your estate will go as smoothly as possible.