Follow These Tips to Build and Maintain a Solid Estate Plan

2 Mins read

It’s always a good idea to build and maintain a solid estate plan in an emergency. There are three simple steps when planning your estate: preparing essential documents, transferring your assets, and setting up power of attorney and healthcare directives. Below you can find more information on these steps and other tips to help you build a solid estate plan.

Prepare Your Financial Documents

Preparing your financial documents is one of the most important steps in estate planning. Important documents include your will, trusts, powers of attorney, and healthcare directives. These documents are essential in ensuring that your wishes are carried out in the event of your death or incapacity.

Some people choose to DIY their estate planning, but it’s often best to seek the help of an experienced attorney. An attorney can help you navigate the legal complexities and ensure that your documents are properly executed.

Transfer Your Assets

Another essential step in estate planning is transferring your assets. Your assets include your home, car, bank accounts, investments, and life insurance policy. You’ll need to decide who you want to receive these assets in the event of your death.

In most cases, it’s best to transfer your assets to a spouse or other close family member. However, you can also choose to set up a trust to hold these assets for your beneficiaries. In addition, some transfers of assets are written into law. For example, a spousal right of election entitles a spouse to claim one-third of their spouse’s estate. Consider speaking with a lawyer to help you understand the laws around asset transfer in your state.

Set Up Power of Attorney and Healthcare Directives

Another important aspect of estate planning is establishing power of attorney and healthcare directives. Power of attorney allows you to appoint someone to make financial and legal decisions on your behalf if you cannot do so yourself. Healthcare directives allow you to appoint someone to make healthcare decisions for you if you cannot do so yourself.

It’s essential to choose someone you trust to make these decisions for you. This person should be someone who knows your wishes and will act in your best interests. You can revoke or change these directives at any time, as long as you’re of sound mind.

Review Your Plan Regularly

Many people review their estate plan regularly when they review their whole financial plan. You should check your estate plan at least every few years or whenever a major life change occurs, such as a birth, death, marriage, divorce, or job change. Regular reviews will ensure that your documents are up to date and reflect your current wishes. If there is a significant life change, it’s also a good idea to hire a lawyer to review your documents and make any necessary changes.

Prepare Ahead of Time For Probate

Probate is the legal process of distributing a person’s assets and money after death. It can be a long and expensive process, so planning is important. One way to do this is to set up a revocable living trust. This type of trust can help you avoid probate altogether.

Another way to prepare for probate is to name a personal representative in your will. This person will handle your estate and ensure that your assets are distributed according to your wishes. You can also take steps to make the probate process more efficient by titling your assets properly and keeping good records. For example, you should title your home in joint tenancy with right of survivorship, which will allow your home to pass to your surviving spouse without going through probate.

Estate planning can seem daunting, but it’s important to take the time to do it right. By following these tips, you can build a solid estate plan that will protect your assets and money and ensure that your wishes are carried out during your death or incapacity.

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