One of the best ways to ensure that your family and loved ones reaps the fruit of your labor after your death is by planning your estate. Now, I’m not just talking about drafting a will with the help of an online tool. I am talking about hiring an estate planning lawyer to make a really good estate plan; the perfect gift to your family and loved one after your death.
A good estate plan comes with a few estate planning document. Of course, there is still the misconception that estate planning is all about creating a will. Sorry to break it to you this way, but estate planning is far more than creating a will. To create a perfect estate plan, you’ll have to consider documents like power of attorney, a trust, a last will and testament, advance medical directive.
In this article, we’ll be taking a look at the five steps to create an ideal estate plan. However, before we delve into that, let’s look at what estate planning entails.
What is Estate Planning?
Estate planning is very important, which is why you need to make one while alive to ensure that your family and loved get a portion of your assets after your demise. Also, before you consider making an estate plan, it is crucial that you have a little knowledge of what this plan entails. You can plan for something you have zero idea if, right? So, let’s take a brief look at what estate planning entails.
Estate planning is basically plans made to take care of ones estate after his or her death. This plan covers:
- The distribution of the decedent’s assets
- The creation of important estate planning documents like trust, power of attorney
- The management of the deceased assets
- The payment of estate taxes and unpaid debts
- Creation of a will
It is not shocking that about 74% of Americans find estate planning confusing. I bet it’s because whoever talked to them about it, wasn’t quite clear. So, if you fall among the category of people who find this topic hard to understand, below are some simple steps for estate planning. Hopefully, when you get to the end of this article, you’ll find this topic as interesting as your favorite novel.
5 STEPS ON HOW TO MAKE A PERFECT ESTATE PLAN
A perfect estate plan is an estate plan that mirrors your wish and make adequate provision for yourself (in the event of incapacitation) and your loved ones. You can create a perfect estate plan, one that boast of all the necessary estate planning documents. Creating a perfect estate is very possible and below are 5 steps on how to go about it.
- Hiring a competent estate planning attorney
The estate planning attorney you decide to hire, will determine how your estate plan will turn out. If you hire an incompetent estate planning attorney, there is a huge possibility that you will get an estate plan that is below par.
A competent estate planning attorney should be able to help you create an estate plan that mirrors your wish. This individual should also be able to advice you on critical areas and help you avoid major estate planning loopholes.
- Create a trust
A trust is like a legal vehicle created by a grantor who places the assets in the trust in the care of a trustee. Creating a trust has lots of benefits. First off, a trust can help prevent probate and it can also be used as a tool for protecting and maintaining an individual’s assets. If you want to create a perfect estate plan, ensure you create a trust.
- Create a list of your assets and the people you owe
To plan your estate, you’ll need to calculate your net worth. The best way to do this is by creating a list of all that you own (assets) including your debts. As soon as the list is ready, you can calculate your net worth by adding your assets such as your investments, bank accounts, personal properties, etc., then subtract your debt from that. Doing this, should provide your lawyer with a clear insight into your finances which will help him decide if your estate is taxable or not.
- Select your beneficiaries
Choose those who’ll inherit a portion of your assets after your death. Ensure you take your time so that you make the right choices. Also, select the assets you wish to transfer to them after your death.
- Create a financial power of attorney
A financial power of attorney enable you to choose an individual who will oversee your finances should you become incapacitated. The individual you choose will be regarded as an agent or an attorney inn-fact while you remain the principal. A POA also gives the agent authority to make business transactions on your behalf.