Many people are familiar with the term estate plan, but few are aware of all the steps that it entails. Estate planning is all about staying prepared for the possibility of death or illness within the family. There are a couple of steps involved in the process, and it might take a couple of days for the entire process to reach completion. The following are the simple steps involved in making an estate plan for your family.
Make Your Will And Consider A Trust - You will state in your will who you want to inherit the property and name the guardian to take care of your minor children if something happens to you and their other parent. If the property is held in a living trust, then the survivors will not have to go through the expensive and time-consuming affairs of a probate court.
Making Healthcare Directives - Specifying your wishes for healthcare is helpful in case you are unable to take the medical decisions all by yourself. Healthcare directive involves a healthcare declaration and a power of attorney for healthcare. A power of attorney gives someone the power to make decisions about your healthcare when you cannot.
Making The Financial Power Of Attorney - You can give a trusted person the authority of handling your property and finances if you become unable to handle your own finances. The person whom you trust to handle the finances is called attorney-in-fact or agent, but he need not necessarily be an attorney by profession.
Protecting The Property Of Your Children - You should name an adult for managing any property and money your minor children inherit from you. You can name the same person as the personal guardian whom you have named in the will.
Filing Beneficiary Forms - Name a beneficiary for retirement plans and bank accounts to make the account automatically become payable on death to the beneficiary. It lets the funds skip the lengthy probate process.
Covering Funeral Expenses - You can set up an account payable at death at the bank and deposit your funds in it to meet your funeral expenses and other related costs.
Understanding Estate Taxes - Most states levy an estate tax if the taxable estate that you have, amounts to over a certain amount. You will have to consider this factor in your estate planning and let your attorney explain it thoroughly to you.
It is important to store all the documents safely so that your family can access it all easily after your death. You executor will need access to your trusts, will, real estate deeds, insurance policies, certificates for stocks, annuities, bonds, and so on. So, make sure that everything is in order for them to gain access.