Estate planning is a very important step in everyone’s life. It’s the process of planning for a future for your family after you have passed away. In the event of your death or incapacitation, your wishes are executed regarding your assets, your children, and your funeral arrangements. Contrary to popular belief, you don’t have to be a rich person to make plans regarding your estate. Your estate represents all that you’ve earned and saved throughout your life, so at any size, it’s worth the time to plan what will happen to it.
What Are The Steps In Estate Planning?
Estate planning is the legal process of passing on your assets after you die. It comprises several steps that ensure there are no questions or gray areas when it comes to your final wishes. Some of the most critical planning steps are as follows:
- Make a will
- Set up a trust
- Set instructions for your health care – These are health care decisions you make now in the event that you are unable to make them later.
- Set up power of attorney – Pick someone you trust to solve any problems you did not plan for.
- Name a parental guardian for your minor children – This person will also be responsible for handling any money or property your children will inherit from you.
- Name your beneficiaries – Retirement accounts with a beneficiary can skip the probate process and are automatically paid upon death. This can be a great comfort to your family while the rest of your assets held up in probate court.
- Consider the estate tax – If your taxable estate is higher than $12.06 million, the federal government will impose an estate tax on what your family will inherit. Your lawyer can help you find ways to plan for and minimize this.
The First Step
The first step in the estate planning process is to inventory your assets. None of the steps outlined above can begin until you know precisely what you have and what it’s worth. Your assets are usually broken into two categories, tangible and intangible. Your tangible assets are:
- Houses, land, and real estate
- Jewelry, art, and antiques
Your intangible assets are:
- Bank accounts, stocks, and bonds
- Retirement plans or life insurance policies
- Ownership in a business
If necessary, request bank statements or employ appraisers to find the exact worth of your estate. The more work you do for the planning process, the less your loved ones will be burdened after you pass.
If you’re ready to take the first steps toward estate planning, we can help. Call The Law Offices of Rusty Willard at (601) 824-9797.