As adults, we learn that careful planning is necessary when buying a house or car, putting together a budget, planning a vacation, and running a household, but a lot of people don’t even think twice about putting together an estate plan. Perhaps this is because an estate plan has a rather lofty sound to it, or because a lot of us don’t like discussing anything that has to do with mortality. Practically speaking, an estate plan is one of the best ways to have your affairs in order in case you should die unexpectedly. Plus it helps ease the burden your loved ones will face when you are gone.
An estate plan doesn’t have to be fancy or expensive, and having a few things to consider will help you make a plan that can be easily put in place and last for years. You can always make adjustments should your income or lifestyle change.
Will
A will is a great place to start when it comes to estate planning. A solid will can be drawn up quickly through a law office, or you can find very reputable options online. A will gives you the ability to offer clear instructions on how your affairs should be managed upon your death. Wills can be simple or complicated, but having one helps the court determine the best path to travel when your estate goes to probate. And yes, most wills do go through probate, unless you have a high-value estate that can be placed in a trust.
A great add-on when drawing up a will is to make a living will, which explains medical directives for your family and hospital staff should you become incapacitated.
Property And Assets
When it comes to your property and assets, there are a variety of options when making an estate plan. In a will, you can list your preferences for disbursement of your assets, but if you suspect probate to be a possibility, you might want to consider other methods of sharing what you have left. If you have high-value assets, your best option is placing everything into a trust, which is a great way to help beneficiaries avoid the cost and time associated with probate.
While there are circumstances that can still lead to probate, in theory you can list beneficiary designations on all of your bank accounts, retirement accounts or life insurance and those assets will be directly passed on to the beneficiaries upon your death without the need for probate.
There are also methods of passing on your home to someone without going through probate. This can be done through a transfer-on-death deed or a lady bird deed, though lady bird deeds are only recognized in a handful of states.
Guardianships
If your children are under the age of 18, or if you are the primary caretaker for a disabled relative, you should name in your will a person or persons who can assume guardianship upon your death.
By determining a guardian, you can help keep your children from entering the foster system or your relative from entering a state facility away from family. While the courts don’t have to abide by your wishes, the judges typically do, barring any considerable disputes.
Funeral Arrangements
If you wish to relieve family members of this burden, you can pre-plan your funeral. Some people take care of everything all at once and leave instructions in their wills, others go ahead and just purchase a plot, which oftentimes is connected with another family member. Another option is to make a down payment with a preferred funeral home.