When it comes to estate planning, you can never be too careful and detailed. The more detailed and proper your plan is, the more confident you can be that your beneficiaries are taken care of and your assets do not fall into the wrong hands.
So, to make your estate planning easier while making sure that you’ve done everything necessary, below are all the points that will take you in the right direction.
- List out all your valuable physical and non-physical items
To make things easier for you, make a thorough list of every valuable item (usually items whose is more than $100) that belongs to you. These may include your home itself, vehicles, laptops, T.V and audio system, jewelry, power tools, collectibles and more. What you consider valuable is entirely up to you.
Secondly, make a list of all non-physical assets that are valuable to you like things that belong to you on paper. These include bank accounts, IRA assets, 401k plans, brokerage accounts, life insurance policies as well as any other insurance policy such as auto, health, long-term care, homeowners, and so on.
- List out organizations and other charities
If you are a member of any organization like The American Legion, AARP, AAA Auto Club, College alumni or Veteran’s association, then make sure to list them out. If you have been an active supporter or donor of any charity, you can include those too.
Organizations like these may have accidental life insurance benefits for members. If your organization(s) has offers like this, your heirs will be able to receive the assistance. Apart from the benefits, listing them out is also a good way to let your heirs know that such organizations and charities are the ones that you hold dear.
- List out your debts and cover them with insurance
Next, make a list of all debts that you may have, including open credit cards that may or may not have balances. These may include mortgages, auto loans, HELOC (home equity line of credit) and other debts. The best practice to make sure that you list out everything is by running a credit report.
Now, if you want these debts to be paid for at the time of your death, and also make sure that your family is provided for, you can make use of insurance. They may be disability, homeowners, auto, life insurance or others.
- Determine your beneficiary designations
Now that you have every important asset listed out, it is time to determine beneficiary designations. This means that you can designate a family member or a close friend to receive your asset after your demise. Usually, this is achieved through banks and other financial accounts called POD or pay-on-death.
Almost every state allows beneficiary designation when it comes to brokerage accounts. While in some states, it is also available for motor vehicles, real estate, jewelry or any other valuable asset that has title document called TOD or transfer-on-death.
- Don’t forget a will or a trust
Don’t forget to create a will. It is one of the most important parts of estate planning as it clearly lays down asset distribution among your beneficiaries. Everyone who is above 18 years of age should have a will, in case of any unforeseen accidents. Hire an attorney to help you create a detailed will.
You can also consider a trust if you have a huge estate with several beneficiaries. It is generally the best and most common choice if you want your asset distribution to go smoothly after your death, minimize estate taxes and avoid probate. Make sure that you appoint a qualified, responsible, healthy and trustworthy trustee.
Posted in: Estate Planning