Being of sound mind and body is what you wish for yourself and your loved ones, of course. But an unexpected illness, injury or surgery can change everything quickly, especially if there is no planned course of action. Simply put, if something were to happen to you prematurely, would your family be financially equipped to move on and live their lives the way you would want them to? Many people put off having an estate plan as they feel it is unimportant.
However, it is never too late to start thinking about your will and draft a plan that ensures your family is looked after financially and physically for years to come. Creating an estate plan is both important and time-sensitive. Without one, your assets may be divided by the court system among your loved ones according to state laws. This could create conflicts and force family members to make on-the-spot life changes. So if you are ready to create an estate plan that will protect your assets, keep your family on one page, and reduce stress for them after you are gone, start by taking these seven simple steps.
- Form a Team
When making an estate plan, there are many things to consider; the first is choosing the right professionals. When selecting a financial advisor, tax professional, and estate planning attorney, make sure they know the difference between will and trust and are skilled in estate planning law. They can help you develop a personalized estate plan to ensure your assets are managed correctly.
- Make a List of Your Wishes
Your estate plan should clearly state what you want to happen with your assets, beneficiaries, and possessions after your death. Draft your will in a way that your specifications are clear, easy to follow, and the court doesn’t have to make decisions regarding your assets and possessions. Your estate plan should make these decisions for your pleasure and benefit. This means that your estate plan should include all the components, such as a will, power of attorney, living will, medical power of attorney, and a funeral plan. You will want to make sure that these components, which can be very complex, are up to date and adequately reflect your current wishes.
- Nominate a Guardian for Your Children and Dependents
If you want to plan for the future, you need to make some crucial decisions, and one of those is who will look after your kids or dependents if you die. You need to choose a person you trust to take care of any dependents you may have after you have passed away. That person can be anyone of your choosing, including a family member or a friend with whom your kids are comfortable.
- Protect Your Business
An essential aspect of business ownership is creating a plan for unforeseen circumstances because your family will be your primary beneficiary upon your death. If you are the sole owner of a business, you should have a succession plan in place. If you are in a partnership, it is crucial to have a buyout agreement so that your family does not suffer after your death.
- Look for Trusts
A trust is a legal arrangement that allows you to manage your assets after you pass away. You put money or other assets into a trust, name a trustee, and the trust holds and manages those assets. The trustee is legally obligated to distribute the assets according to your wishes. A trust can be revocable or irrevocable and can specify how the trustee distributes the assets. The trustee can be a bank, an attorney, or a financial adviser. The trustee must act in the best interest of the beneficiary, but the beneficiary has no direct control over the trust.
- Organize Your Documents
Once you have decided on your will and drafted any other necessary documents that make up your estate plan, organize them by creating an estate binder. When you do this, keep your documents organized in one place that is both secure and easily accessible. You might consider storing the original copies somewhere, like a safe deposit box or fireproof, waterproof safe at home.
- Review Your Estate Plan
As your life changes, your estate plan also needs to change. When you first start planning, your estate plan is likely to be based on your current goals, needs, and desires. But as time passes, those plans change. You should review your plan whenever there is a significant life change, like marriage or divorce or the birth of a child or grandchild.
The Key Takeaway
Protection for your family’s future should not be complicated, and you should not wait for it. You never know when you might suffer from a sudden illness or get into a fatal accident. Thinking about these instances is not easy. Nevertheless, we can not eliminate these possibilities from our life. Make an estate plan today—and give yourself the gift of peace of mind.