For people with significant assets, planning for what happens to the estate and family when you are no more is imperative to avoid the burdensome taxes and protect the future generations. Even those with modest net worth have substantial reasons for ensuring their estate plans are strong and solid. Legally binding plans will allow you determine how you want your property to be distributed and reduce chances of family discord and ensure children are well cared for. The following steps will help you set up a certain and stable legacy for your family.
Create a will
Having a will is necessary, and this is known to most people. You need to ensure that your chosen heirs will get the assets you leave for them. If you fail to make a valid will, your property gets distributed according to the state law of intestacy. Most states it will go to your spouse and children. If you are not married and do not have children, then it will go to your blood relatives.
Another good way to secure your estate plan is by setting up a living trust. If the property is held in your living trust, then your heirs can avoid the time consuming and expensive process in probate court.
Establish instructions on health care
It is important that you consider your wishes as far as personal health care is concerned. Having instructions for your care set up is vital if you are incapacitated or unable to make medical decisions. Establishing directives like medical power of attorney and living will give the person of your choice power of making decisions on your behalf.
Designate the financial power of attorney
You should consider designating a power of attorney for your finances. This gives somebody you trust the authority to control your finances and property when you are unable. The person can handle all your finances and is called an agent or an attorney-in-fact.
Name a guardian for minors
You need to name an adult trustee to manage money or property that your minor children get from you. This person will typically also be the personal guardian designated for in the will for your children in the will.
Choosing beneficiaries for your bank accounts is a great idea if you want to make the accounts automatically payable to your beneficiaries when you are gone. This saves money as it allows these funds to skip the probate process.
Planning using these steps will ensure that you leave behind a legacy of stability and security and not undue stress and chaos to your family when you are gone. This way you can plan your estate well.