Did you think you had to be rich to have an estate? Think again! From a legal perspective, your estate includes everything you own, from the tangible property like a car, house, furniture and intangible assets like insurance policies, bank accounts, and retirement and investment accounts. According to the recent article “How to Plan Your Estate” from The Military Wallet, you don’t have to be rich to have an estate. However, it would be best if you had an estate plan; the best time to start planning is right now.
An estate plan is more than simply passing your property along to heirs. It is also how you prepare for life’s unpleasantries, including becoming incapacitated or unable to make decisions on your own.
Your estate plan protects you and your beneficiaries. Without a will, the court will determine who will get your assets subject to probate, following the laws of your state. You decide who should receive your probated property with a will, from family members to charities.
Your estate plan protects your children. Your will nominates a guardian who will care for your children if you die before they turn 18 or if you have a disabled child with special needs, who will care for them for the rest of their life. Without a will nominating a guardian, the court will make these decisions.
Your estate plan protects your family by preventing conflict. Your wishes are clear in a will and other estate planning documents. The more details, the better. No one can say they knew what you wanted because it is documented and memorialized in your estate plan.
Getting ready to meet with an estate planning attorney will be easier if you take it step by step.
Make an inventory of all assets, including
- House, land, and any real estate property
- Cars, boats, and any other vehicles
- Bank, investment, and retirement accounts
- Life insurance policies
- Health savings accounts
- Jewelry, valuables, and collectibles
- Digital assets, including website URL, username, and password
- Cryptocurrency, including all information for an executor to be able to access accounts
Create a plan for the different scenarios in your life. Who would you want to raise your children if you and your spouse die while children are minors or cannot care for them because of illness or injury? How will your spouse pay the mortgage if you die unexpectedly?
Make a list of all accounts with designated beneficiaries. This typically includes life insurance, retirement plans, and annuities. These designations should be reviewed whenever you have a significant life event like marriage, divorce, birth, or death.
You’re now ready to meet with an estate planning attorney. Your estate plan should include a last will and testament outlining who should receive your property, who will distribute your estate (your executor), and who should raise your children if you die while they are under legal age.
A Health Care Proxy is used to name a person who can make decisions about your healthcare if you cannot. A Living Will outlines the details of medical treatment you want or don’t want when you are near death.
Power of Attorney is a document giving someone else the power to take care of your finances at any point if you can’t go because of illness or incapacity. This avoids your family members having to go to court to obtain guardianship, which takes time and is a costly proceeding.
Reference: The Military Wallet (Aug. 25, 2022) “How to Plan Your Estate”