Estate planning can be a sticky business. Who wants to contemplate their death and consider who gets what? That’s probably why only around 45 percent of adults have a will.
Unfortunately, putting your head in the sand won’t be helpful to your loved ones. Questions about what your wishes are will have to be answered by relatives after you are gone. They may not guess correctly. They might even argue about it while trying to grieve your loss.
Worse, the state steps in when someone dies without a will and decides how assets will be distributed.
Here are few tips that might help ease your estate planning process:
- Understand the need for a will: Laws vary by state when it comes to who gets your assets when you die. In most cases, if you are married, your spouse and kids will share the estate equally. If you are single, the courts will decide which of your blood relatives gets the estate. Should you have minor children, you’ll want to make sure the guardianship is set up so that they are well cared for.
- Create a list of assets and ask yourself where should they go?You will want to draw up a comprehensive list of assets – investments, retirement accounts, any insurance policies, real estate and collectibles – just to name a few. Who will inherit these items? If you have children, what kind of situation do you want to set-up for them and who will care for them in the event of your death?
- Decide on an executor: This person will be in charge of managing your estate and distributing the property. They will also file your tax returns. The executor can be a friend, relative, or a professional such as an attorney.
- Assign a power of attorney: In the event that you are incapacitated or have a health crisis, you will want someone you can assign power of attorney. They will pay your bills, manage investments and make other key financial decisions.
- Establish a living will: Similar to a power of attorney, the living will governs your health care choices. The assigned proxy will advocate on your behalf. They need to be able to understand your treatment plans and make tough choices when the time comes.
An estate plan can provide peace of mind for individuals and family members. Having the right estate planning documents in place can alleviate concerns about what may happen in the event of incapacitation or death.
Should you have additional questions or want help with estate planning you may want to consult with an attorney who focuses in this area.