If you’re like most people, you probably don’t spend much time thinking about the details of your death, and if you do, it probably isn’t in a positive light. However, planning ahead so that your loved ones aren’t burdened with stress and paperwork after your death could be one of the most thoughtful things you ever do.
There are actually several types of documents that, together, create an estate plan, which will make all the legal preparations as smooth as possible for your loved ones.
Not everyone should be making your estate plan
When someone dies without a will, that’s called dying intestate. This happens far more often than you might think—in fact, over 20% of all Americans die intestate, according to statistics from 2015. And with Baby Boomers starting to retire at an increasing rate, that number is expected to rise in upcoming years, meaning a surprising number of people will never leave their loved ones behind with a clear plan for how they want their assets and property distributed after they die.
These are some tips to get started
1) Naming beneficiaries for your retirement accounts (401(k), IRA, etc.)
2) Naming guardians for any minor children you may have
3) Establishing a will or trust to handle estate administration and distribution
4) Consulting with a lawyer who is familiar with estate planning and will be available after your death These are just some basic steps; we recommend that you contact an attorney in order to address your specific situation and needs.
What happens if you don’t have an estate plan
If you don’t have an estate plan, your assets may be divided according to state intestacy laws. That means that if you’re married and you die without a will, your spouse gets all of your assets (subject to any debt).
If you’re not married or you’re single, your parents get everything—if they can be found and are still alive. It also means that your wishes for what happens to those assets aren’t likely to be honored—unless somebody decides to go against them after they’ve inherited.
How do I choose an estate planning attorney?
Choosing an estate planning attorney is a difficult task, especially if you’re not even sure what role you need them to play. However, if you choose one from a small list, all it takes is a quick Google search to get information on them and their expertise.
Once you know who it is that will handle your estate plan, simply contact them directly and schedule a consultation to get started!
Start with these documents
When it comes to creating an estate plan, you need a checklist that includes these documents: Last Will and Testament (also known as Last Will or Wills), Power of Attorney for Finances (also known as Power of Attorney or POA), Advance Health Care Directive and Living Will (often combined into one document called Advanced Directive).
Naming Beneficiaries, Trustees, and Guardians (for minor children)
Name a guardian to care for your children if something happens to you, and also name a trustee to make sure your assets are used appropriately. If you have minor children and no trust, name at least one co-trustee with authority over their inheritance until they turn 18 or 21 (depending on state law). It’s easy enough to decide who would be the best fit for each role, but that doesn’t mean it will always work out as planned.
If you’re concerned about who will make your health care decisions, or want to be sure your wishes will be followed if you become incapacitated, advance directives can help clarify these questions.
These legal documents spell out what kind of medical treatment you would like to receive and who should make medical decisions for you in certain circumstances.
Online estate planning checklist
While it’s easy to put off making decisions regarding your estate, it’s better to get them done sooner rather than later.
Here are some things to consider as you organize your estate plan:
Are you donating a percentage of your wealth to charity or non-profit causes? Do you have an emergency fund in place, just in case anything happens unexpectedly? Have you updated your will or living trust recently? Don’t put these things off until tomorrow; do them today!
Tips on choosing the right attorney for your needs
You wouldn’t hand over your financial portfolio to a lawyer who specialized in consumer law, and you shouldn’t approach choosing an estate-planning attorney any differently.
Just as you shouldn’t trust your financial well-being to anyone who doesn’t specialize in finance, don’t leave a fundamental aspect of your future up to someone whose expertise lies elsewhere.
Resources for further reading
The day you die, somebody has to be responsible for your estate—and most of us don’t want it to be a court-appointed executor. Even if you think that person is your spouse, he or she might not necessarily agree.
So who do you trust with your assets and personal wishes after death? The answer may surprise you! Here are four options:1) Your spouse2) A power of attorney3) A living will4) A family member