The process of creating a solid estate plan takes time. It requires meticulousness. You need an expert to help you design the right estate plan. Before jumping into the process, gather all the information. Bring all your bank accounts. Put together all your assets. Hire the best attorney. Here are key things to consider before creating your estate plan.
According to research, most Americans die before paying their debts. This puts their families under pressure when it comes to clearing their debts. According to data from Experian, more than 73% of Americans die before paying huge debts. Mortgage debts account for the biggest share of all debts owed.
Upon your death, the authorities will take debt from the total worth of your estate. Common types of debts include credit cards, tax-related debts, auto loans, mortgages, as well as student loans.
Plus, if your spouse cosigned a loan for you, he/she will have to pay. They will roll over the loan to your spouse. On the other hand, if you have credit cards that don’t have anyone’s name, your assets will be tied up. Don’t allow debts to tie up your assets before distribution. Manage your debts carefully. Pay your loans in time. Consolidate all your loans. Design the best debt consolidation strategy.
Go through all your bank accounts. Record them down. Don’t lose any account. If you have moved or opened new accounts, ensure that you have recorded them down. Remember, forgetting your bank account is easy. Plus, when you are gone, the account can be easily forgotten.
Name the beneficiary of your accounts. Doing so will eliminate the need for probate, which is usually tiresome and long. The beneficiary will have to wait for a long time to access the funds. Make their work easy by naming a beneficiary.
Choose Your DPA
Choose the right person to make vital financial decisions. Remember, getting this process wrong can put your family in trouble when you are going. Choose a trustworthy person. According to lawyers, avoid choosing relatives.
Choose an honest person. Go for a detail-oriented agent. Choose an individual who can maintain records properly. If you can, go for someone with a financial background. Preferably, select a financial advisor, lawyer, or even accountant.
You can also name co-trustees. In this option, one party can be a relative and the other one a lawyer. This option ensures that your family is included in the decision-making process. It also ensures that all decisions are made based on proper financial management strategies.
Do you own cryptocurrency coins? Well, you should consider your cryptocurrency wallet when drafting your estate plan. Provide all the relevant details to your executor. Not revealing this information may mean losing the money forever.
Re-Evaluate The Estate Plan
An estate plan can be reevaluated. It’s not permanent. You can remold it to fit your current needs. Remember, your life keeps on changing. New things keep on coming up. Make your estate plan up to date. Reevaluate it. The following are life changes that can necessitate the reevaluation of your will.
- Marriage—if you get married, you will need to change your will to reflect on your current life.
- Children—if you have got kids, your estate plan will need to be changed to include them.
- Purchases—if you have made a large purchase (for instance a house), you will have to
- Divorce—getting divorced will automatically change your estate plan.
- Death—if your spouse or kid dies, you will have to change your estate plan.
- Financial account—if you are planning to have new accounts, you need to change your estate plan.
Here are additional instances that necessitate changing an estate plan:
- Changing the beneficiaries
- Switching to a new job
- Changing your income levels
- Getting inheritance
- Change in your state’s tax laws
- Offering a large gift to someone you love
Update It Regularity
Update your attorney whenever you are making these changes. Ensure that your changes are per the law. When making the changes, pay attention to tax laws. Don’t forget about inheritance laws. These laws can affect your estate when you are gone.
Understand The Rules
Once new rules are enacted, you should make certain technical changes to your will to reflect these changes. Ratifying these changes will make your estate plan valid. Don’t wait until you are old to create an estate plan. Start early. Having an estate plan will help your family to move on after you are gone. They will not struggle to access the funds.
Qualities of A good Estate Plan
Estate planning is quickly becoming fundamental too in human life. It allows you to distribute your assets according to your wishes. An estate plan minimizes future conflicts within your family. It also eliminates the need for probate. Here are the top qualities of a good plan:
A good estate plan should be simple, accurate, and concise. A good plan should contain up-to-date information. For instance, all beneficiaries in the will should be stated accurately.
A good estate plan should consider your needs and wishes. For instance, it should outline how you will receive medical care when you are incapacitated. It will also reflect your final wishes,
The goal of an estate plan is to secure the future of your loved ones. These goals should be captured in an estate plan.
All parties in estate planning—including representatives, agents, executors, guardians, lawyers, etc.—should be trustworthy. They should respect your wishes. Also, a good estate plan should be drafted by highly qualified professionals. It should not create conflict within your family.
If You Need It, Draft It Today
An estate plan allows you to plan your things. Thus, instead of leaving others to do it for you, plan it through your estate plan. For instance, you can issue instructions regarding the distribution of your property. Plus, you can plan your medical care. In a nutshell, estate planning is all about making your life and that of your loved one smooth.
On the surface, estate planning looks complex. However, with the right steps and tricks, you can create the right plan. Think about proper debt management. Pay attention to all your bank accounts. Consider all your assets. Create a will. The above are key factors worth considering before creating an estate plan.