The idea of making a plan or your assets after one’s death isn’t something most of us look forward to but is a necessary step to make sure our personal property is appropriately distributed to our loved one. Making provisions for your property now will save your loved ones the headache of having to sort through your belongings once you are gone. Not sure where to begin with planning your estate? Read on for a comprehensive guide on how to properly distribute your assets in your estate plan.
1. Leave Clear Plans for Your Home
One of your first priorities when making your estate plan should be to leave clear plans for any property you have. If you plan to leave your home to your loved ones, it’s essential that you make the proper plans to do so. if you fail to include the words “joint right of survivorship” or “transfer on death”, create a will, or put together a living trust, your family members won’t be able to access your home until an executor is appointed by the court. You can avoid this type of confusing situation by clearly laying out plans for your property after your death.
2. Understand the Details of Probate
Probate court establishes the validity of an individual’s will. This process serves to settle the debts and distribute investments, assets, property, and business interests of the deceased. Though probate varies by state, it’s best to try to avoid any complications or delays in this process.
Avoid having to experience probate by setting up a will-based plan. Experts in estate plan services share that creating a revocable living trust will allow you to make the estate plan private, keeping the matter out of probate court. This process will allow you to appoint a trustee to manage your assets and debts in the event of death or incapacitation.
3. Plan for Any Contingencies
While your estate plan should be enough to square away all your assets after death, it’s important to always put together a backup plan. Estate experts agree that it’s essential to include multiple contingencies in your estate documents. This should include a plan for unimaginable and unlikely scenarios, so it’s best to name backup trustees, naming a financial or professional institution as a last resort.
4. Consider Personal Items
Though most people focus on dividing up their assets and property in their estate plans, it’s equally as important to make a plan for personal items that may not have any objective value. Items like a family heirloom or journal all hold some sort of personal significance and should always be included in an estate plan. In doing this, you’ll ensure that these memorable items go to the right person after your passing.
5. Be Specific About Palliative Care
Palliative care is defined as specialized care for individuals with serious illness. Palliative care focuses on making the individual comfortable with the treatment and is considered a modern aspect of estate planning. Should you include palliative care in your estate planning, don’t be afraid to get very specific. Work with an expert estate planner to better define what you should include as part of your plan for palliative care.
6. Consolidate Your Financial Accounts
Even with an estate plan, your family may be left in confusion if you don’t consolidate your accounts. Everything from your insurance policies, bills, retirement savings, credit cards, and paychecks should all be organized in a way that makes it easy enough for your family to access them. In addition to consolidating your accounts, it’s recommended to list all online accounts in your estate plan. This will make it easier for your loved ones to gain access to your accounts and get all of your information sorted.
7. Consider Tax Implications of Your Plan
According to the federal tax code, the amount of money that individuals can gift to others untaxed has been raised to $11 million. Though few individuals will exceed that amount of wealth, It’s in your best interest to alleviate the tax burden for your loved ones. With the help of an estate planning expert, you can avoid losing money in taxes as you put together your estate plan.
Estate planning may not be something to look forward to, but it will help your loved ones in the future. Keep this guide in my as you take the next steps in putting your financial plan together.