Overwhelmed by the idea of an estate plan? Focus on these three steps.
Three steps can help ease the process of putting together an estate plan.
Young, old, married or single, these demographics do not change the fact that everyone should have some sort of estate plan. An estate plan allows an individual to greater control over his or her life. It addresses assets and certain health care decisions. The plan can be simple or complex, depending on the maker’s wishes.
Even though these plans are important, many put off establishing even a basic plan. Putting together an estate plan may seem like an overwhelming process, but the burden can be eased with these three main steps:
- Figure out what your estate is. The first, and arguably most important step, is determining exactly what your estate is. The Oxford Dictionary defines an estate as “all the money and property owned by a particular person,” but the legal definition is much more complex. In addition to actual property like real estate and tangible possessions, an estate also includes stocks, securities, retirement accounts and insurance policies. The estate must also take into consideration debts, like mortgages, loans, credit cards and other obligations.
- Figure out who your beneficiaries are. A recent article by Nasdaq touched on this issue, noting determining beneficiaries can be the most emotionally difficult portion of putting together an estate plan. Beneficiaries may include more than just family members and friends. In some plans, churches, schools, parks, libraries and other charitable organizations are also listed.
- Figure out who you want to get what. Once the list of beneficiaries is determined, the next step involves actually deciding what items are passed along. This can be done in a variety of ways. In some cases, it may be wise to gift during one’s lifetime. This can result in estate tax benefits for the gifter while keeping assets within the family. For those with significant assets, a trust can provide a way to pass along assets without going through probate while also providing the owner with tax savings.
Taking these main steps will help ease the rest of the process. Although these steps are fairly easy, it is important to note that the laws that govern estate plans are complex and often change. It is also important to note that these steps deal primarily with assets and do not address medical decisions. Other documents, like a health care proxy, are needed to meet these needs. As a result, it is wise to contact an experienced estate planning lawyer to help better ensure your wishes become a reality.
Keywords: estate plan