Steps To Creating A Proper Estate Plan

Planning for the distribution of your assets and affairs after you’re gone might not be the most pleasant task, but it’s an essential one. Creating a proper estate plan ensures that your wishes are honored and can provide peace of mind for you and your loved ones, even when you’re not around. Whether you’re young or old, wealthy, or just starting out, having an estate plan in place can relieve a lot of worrying and stress in the event of an emergency.

A solid estate plan is more than just a will and power of attorney. There are plenty of essential details also included, such as medical trustees, financial information, and more. So, where do you start? Follow along with us as we go through the steps to creating a proper estate plan.

Appoint an Estate Planning Attorney

The best planning starts with a good advisor. Hiring a professional attorney like the ones at Grand Strand Law Group is the first crucial step. Estate planning is a critical decision involving your family and finances, where even minor errors can be disastrous. Due to its complexity and time-consuming nature, it’s advisable to enlist a qualified attorney to craft a solid plan. A skilled attorney will analyze your family dynamics, provide guidance, and navigate the intricacies of estate planning. This way, you can worry more about life and less about the legal side of things.

List Out Your Assets

First things first, it’s time to figure out your net worth. Don’t worry; it’s easier than it sounds. Start by making a comprehensive list of all your assets and investments, such as bank accounts, homes, personal property, mortgages, loans, and other personal balances. Don’t forget to include any major purchases as well, including jewelry, fine art, furniture, and anything else you may leave behind. In addition, insurance policies, retirement accounts, 401k’s, cars, student loans, and more should be added.

Your attorney and family can help you fill in any holes that you’ve missed if necessary, but the more information you have upfront, the better. Once you have your list, you can calculate your net worth by simply adding them together. This makes it easier for your attorney to assess if your estate is liable for any taxes or not. 

Will vs. Living Trust

Both wills and living trusts have their advantages and disadvantages that can serve different purposes depending on your situation. Which one you choose is based on your personal preference. 

To simplify, a Will outlines who will inherit your assets, but does not help to avoid probate. Any assets mentioned in a Will will go through the probate procedure, which takes time. However, not all assets will be subject, but this process is necessary to determine who inherits which assets. 

Usually, an attorney will recommend a living trust for clients. A living will appoint a trustee rather than going through probate, allowing them to distribute your assets based on your wishes. Before making any decisions, however, it is still best to discuss your options with an attorney. 

Declare a Healthcare Power of Attorney

A healthcare power of attorney (sometimes referred to as an advance health care directive) is a trustee that you will declare to make any medical decisions for you if you are unable to do so. No matter what age you are, if you are prone to illness, have a chronic condition, or are aging, disability planning is a necessity. 

This can help you avoid any state-appointed guardianship that may make decisions for you that are not in the best interest of your family. Your trustee should be someone you trust, such as a family member, spouse, or very close friend. 

Consider a Financial Power of Attorney

Just as a Healthcare Power of Attorney will make any medical decisions necessary, your Financial Power of Attorney will be authorized to handle your finances. This includes any personal finances, business finances, and property-related payments. 

In legal terms, a principal is someone who gives authority (in most cases, usually yourself). The one who is designated to act on your behalf is called the agent. By including it in your Will or Living Trust, you give your agent the authority to make immediate financial and real estate decisions.

Appoint Any Beneficiaries

It’s important to remember that not all of your assets will be distributed through your will. Some properties may automatically pass to your spouse when you pass away, without needing to go through a legal process called probate. Similarly, if you have savings or investments with a payable-on-death designation, the money or securities will go directly to the person or people you’ve named as beneficiaries. You can specify these beneficiaries when you fill out the necessary forms with your bank or brokerage firm. This helps ensure a smoother transfer of assets to your loved ones during a difficult time.

Also, all 401k’s, retirement, and other life insurance policies will be passed to a beneficiary as well. Make sure to present any necessary forms to your attorney when creating a proper estate plan, ensuring all your assets are covered. 

Organize Your Information

A quick folder on your computer or an active Word document can go a long way. However, it might be better to create a physical folder to store in your home that has all your necessary information in it. Any relevant papers, signed documents, identity information, and digital files should be saved in one convenient place. This makes it easier for your friends and family to find them, saving them money in managing any legal or administrative matters in the future.

To break it down, here’s a list of that important information to keep:

• Will or Trust
• Titles or Deeds to homes or cars in your name
• Any outstanding loans or mortgages on properties
• Savings account information, Pension Plans, and Retirement Benefit Information
• Bank accounts and credit cards (don’t forget expiration date, CCV, and any login information for online banking)
• Power of Attorney papers
• Investment Portfolios for stocks or bonds
• Any and all Insurance policies (life, health, car, and home insurance, and others)
• Funeral requests (Prepayments, arrangements, and who is allowed to know if any restrictions)
• Any hidden items in your home or safety deposit box
• Constant Medications (including name details of your doctors)

A well-crafted estate plan brings peace of mind by reducing future family stress. Remember, it’s not a one-time task but an ongoing process that evolves with your life. Regularly review and update your plan, especially after major life events like births, deaths, marriages, or divorces, to ensure it reflects your wishes and that designated proxies are still willing to fulfill their roles.

Creating a Proper Estate Plan with Grand Strand Law Group

Still not sure how to start the estate planning process? Grand Strand Law Group is here to make creating a proper estate plan as smooth as possible. With our first-time home buyer tips, we are here to help you every step of the way. Give us a call at 843.492.5422. Learn about how we can help with your estate planning now or in the future.