Estate planning is not something that you want to put off until later. It’s a process that needs to be done sooner rather than later because it can help you protect the assets you own and make sure that they go to your loved ones as you intended. Here’s what you need to know about getting started with an estate plan.
Why Do You Need an Estate Plan?
In a nutshell, everyone needs an estate plan because, inevitably, something will happen, and you’ll need a plan in place. A well-drafted estate plan can help with asset protection and ensure they go to their intended recipients.
But what happens if you don’t have an estate plan? Let’s take a look at some possible scenarios:
- If you die without a will, also known as intestate, the state will decide how to distribute your assets. This might not be what you wanted, and your loved ones could fight over your belongings.
- If you become incapacitated and don’t have a power of attorney in place, someone else may need to step in and make decisions for you. This could lead to disagreements among family members about what’s best for you.
- Without a living will, your loved ones may not know what you would have wanted to be done with your body if you couldn’t make those decisions yourself.
If a loved one dies in intestacy, you could contest the will in probate court. This would be a costly and time-consuming process, but with a reliable attorney from a reputable firm like Keystone Law Group, the process can be much more manageable and less stressful for you.
What’s the Process of Getting One?
The good news is that getting an estate plan in place doesn’t have to be complicated. If you’re not familiar with estate planning, you may want to consult with an attorney who can help you draft a plan that’s right for your needs. But here are some steps to get started:
Step 1: Make a list of your assets and liabilities
This will help you determine how much insurance you need and what other provisions you should make in your estate plan. You should include everything from your home and car to your bank accounts and investments.
Step 2: Decide who you want to inherit your assets
This can be a difficult decision, but it’s crucial to think about who you want to receive your possessions from after you’re gone. If you don’t, the state will decide for you. This can be a problem if you disagree with the state’s distribution plan.
Step 3: Choose an executor
This is the person who will carry out your wishes after you die. It’s essential to choose someone you trust who can handle this responsibility. The executor could be your spouse, child, or another trusted family member or friend.
Step 4: Draft a will
This is the most crucial document in your estate plan. A will dictates how your assets will be distributed after you pass away. It can also include funeral arrangements and other instructions, such as who will care for your pets.
Step 5: Name a guardian for your children
If something happens to you and your spouse, you’ll need to have someone you trust to care for your children. This will allow you to rest easy, knowing that your children are in good hands.
Step 6: Create a healthcare directive
This document spells out your wishes for medical treatment if you become incapacitated. Your advance directives could include do not resuscitate (DNR) orders, organ donation directives, and other important information.
Step 7: Set up a trust
A trust can be helpful in estate planning because it allows you to put assets such as real estate and stocks into a separate entity. This can make it easier for your loved ones to manage these assets after you’re gone, especially if they’re not familiar with estate planning.
Step 8: Review your estate plan regularly
As your life changes, so should your estate plan. Review it at least once a year and update it as needed. This will allow you to ensure that your plan still reflects your wishes.
Common Mistakes to Avoid When Drafting Your Estate Plan
People make a few common mistakes when drafting their estate plans. Here are a few to watch out for:
Mistake #1 Not having an estate plan at all
This is perhaps the biggest mistake you can make. If something happens to you and you don’t have a will, the state will make the decisions for you. This could lead to disagreements among your family members and a less-than-ideal distribution of your assets.
Mistake #2 Not updating your estate plan regularly
Your estate plan should change as your life does. Make sure to check it at least once a year and make any needed modifications. This will allow you to ensure that your plan still reflects your wishes.
Mistake #3 Not appointing an executor
If you don’t appoint an executor, the state will choose one for you. This can be a problem if you disagree with the state’s choices. Make sure to choose someone you trust who can handle this responsibility.
An estate plan is an important document that everyone should have in place. By taking the time to draft one, you can rest assured that your assets will be distributed appropriately even when you’re not there. You should also avoid these common mistakes to ensure your estate plan is as effective as possible.