According to experts, less than half of Americans have any estate-planning documents. But making arrangements for the time when you will be gone not only takes care of the people left behind, it also ensures that your bills are taken care of in the way that you desire. Here are a few estate planning tips that will guarantee your safe and efficient departure.
Write a Will
If you pass away without a will, the state may take over and divvy up your assets. Generally, spouses and children get first dibs, then other relatives like parents and siblings. If there is no family, assets go to the state. Also a will determines who will have custody of your children, if you were the last surviving parent.
Review Your Will/Trust Annually
Changes in your finances or personal relationships may necessitate a change in your final will. Since most of us don’t know when we’re going to die, dynamic life changes may require us to make updates to who gets what and how much. To not do so could lead to tension and arbitration among surviving members
Acquire Life Insurance
At least make sure you have the basics covered when calculating how much life insurance may be necessary. Consider the summation of any outstanding debts you may have, your final expenses, and funds for savings goals, like college for the kids. With these costs covered, your family should be able to live comfortably on the reminder of your insurance.
Create Three Critical Additional Documents
Estate planning is about more than our final wishes, it also involves creating documents that determine what happens in case we are unable to take care of ourselves while we are living. A durable power of attorney lets you designate an agent to manage your finances and legal affairs.
A Release-of-information form gives doctors permission to share your medical records with designated others. Advance directives can give power of attorney for health care decisions while you are living.
Work with an Estate Planning Team
Depending on how complex your estate may be, you might need the assistance of a whole estate planning team. Designate a tax professional that can help minimize the amount of income taxes your beneficiaries will pay on their inheritances. A financial advisor will create a suitable investment portfolio for all your assets.
Also ensure that you hire a knowledgeable estate planning attorney. Estate planning attorneys help create wills and trusts, along with ensuring state and federal requirements are upheld. It is generally better to work with a local attorney, as they are most familiar with city and state laws.