Estate Planning Basics

Estate planning need not be overwhelming or confusing.  It can be as simple as making a grocery list or a to-do list.  Follow these easy steps and you could be well on your way to drafting a will or other estate planning document that will protect your families and your assets when you are gone.  If you follow these simple steps, not only will you be able to create an estate plan, but you will also have valuable information in the event you wish to apply for homeowners insurance or loans or when tax time rolls around.

Step 1.  Walk the interior and exterior of your home and make a list of all items worth $100 or more, including your home itself, vehicles, jewelry, laptops, furniture, tools, etc.

Step 2.  Make a list of everything else you own, including 401(k) plans, IRA assets, bank accounts, life insurance policies, long-term care insurance policies, homeowners insurance policies, automobile insurance policies, disability insurance policies, health insurance polices, etc.

Step 3.  Make a list of all open credit cards and other debts.  Debts include loans on vehicles, existing mortgages, home equity lines of credit, open credit cards with and without balances, etc.

Step 4.  Make a list of all charitable organizations to which you belong, including your church, the AARP, veteran’s associations, AAA Auto Club, etc.

Step 5.  Sign and date each of the above lists and make copies.  Give the original to your estate administrator, a copy to your spouse (if applicable), a copy for your safe deposit box, and a copy for yourself to be kept in a safe place.

Step 6.  Review your life insurance policies, annuities, retirement accounts, IRA accounts, and 401(k) accounts to ensure that the beneficiary listed is the person to whom you would like your accounts to go upon your death.  Regardless of what your will decrees, these accounts will pass upon your death to the person listed as the beneficiary.

Step 7.  Contact your bank to opt into the transfer-on-death feature of savings accounts, CDs, and individual brokerage accounts.  These accounts can be transferred automatically upon your death.

Step 8.  Select an estate administrator who will be responsible for following the rules of your will upon your death.  Select a person you trust with making level-headed decisions about important matters.

Step 9.  Contact an attorney to draft a will for you or purchase a will-making software program online to draft a will on your behalf.  Follow the instructions on drafting the will as they relate to signing the will, witnessing the will, and notarizing the will.  Send a copy of your will to your estate administrator.

Step 10.  List whom you would like to act on your behalf in the following ways:

(1) Guardian of your minor children and/or pets (if applicable).  This person will care for your children until they reach the age of 18 or your pets for the rest of their lives.

(2) Personal representative.  This person will probate your estate, pay your debts, collect your assets, and administer your estate once you are gone.

(3) Trustee.  If you create a trust on behalf of your children, this person will administer the trust, following the rules set forth in the trust for distributing assets to your children (or other beneficiaries) in the manner you prescribe.

(4) Healthcare directive / representative.  This person will make healthcare decisions on your behalf in the event you become incapacitated.

(5) Power of Attorney.  This person will have the power to sign your name and make financial decisions on your behalf in case you ever become incapacitated or unable to sign your name.

Again, estate planning does not need to be overwhelming or complicated.  Making the lists discussed above will help you on your way toward creating all the estate planning documents you need.  Having these documents will give you peace of mind and will give you control over your future.  With these documents in order, you no longer need to worry about how your assets will be divided when you are gone.  Always remember to review your will for updates after any major life-changing events, such as marriage, divorce, birth of child, etc.  Contact Excelsior Law Firm, L.L.C. for any estate planning questions or to obtain affordable legal services in the area of estate planning.

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