The term ‘estate’ accounts for an individual’s personal and financial belongings. Moreover, they ensure that everything happens as they wish in a legal and structurally sound manner, including their insurance, car, house, and investment. Therefore, you should entrust this to your loved ones. An estate plan involves you and your family, your executor, and sometimes an organization or institution. Moreover, a lawyer or an advocate can answer questions about taxes, asset titles, and estate management. Now, let us discuss the estate planning process.
Estate planning process
The Estate Planning process will involve nine steps –
- Create a will
- Health directives
- Power of attorney for financial decision making
- Consider life insurance
- Choosing a beneficiary
- Protecting children’s rights over the asset
- Understanding estate taxes
- Taking care of the funeral expenses
- Storing your documents properly
So, let’s dive deep into estate planning and understand every nine steps.
Create a will
A will is a document that contains an individual’s wishes regarding his assets and property, and thus it also describes the guardianship of any minor in the family.
It’s better to decide when you can or can. In case of an individual’s critical health, guidelines should note down. The power of attorney will choose who will handle the health decision and become the signing authority of the individual.
Power of attorney for financial decision-making
It is the most important decision to make an individual or an organization your signing authority regarding all your assets and property and assigned as a trusted individual.
Consider life insurance as the estate planning process.
If you have children or a house or owe a large debt or estate tax, then the estate planning process will consider life insurance.
Choosing a beneficiary
After the demise of an individual, the beneficiary automatically receives the authority to access the bank account and the retirement plans. Moreover, it helps to avoid the probate process.
Protecting children’s rights over assets –
You can choose a trusted individual to protect and manage your assets until the minor assumes authority.
Understanding estate taxes
Estate taxes should be calculated, or have an advocate or lawyer do it for you.
Taking care of your funeral expense
Instead of prepaying your funeral expenses, you can opt for an account in the bank that is payable at death and submit funds to cover the funeral and related expenses.
Storing your documents properly.
Your chosen advocate or lawyer will need access to various documents, which are supposed to be stored properly.
Important points regarding the estate planning process
- It might not be as expensive as you think, but it might be profitable to you.
- No estate planning might be a bad idea-
- In critical health conditions, when you cannot make decisions, the court appointee will become the signing authority. Your family will lose control over all assets and property; thus, the court’s directive regarding guardianship and conservatorship will be followed. Moreover, even after recovery and regaining control over your assets would be difficult.
- In case of death, the asset would be divided upon the law prevailing in that state where only the spouse will receive one portion of the asset, which is not enough to survive. Therefore, in the case of minors, guardianship will be decided by the court and remain a secret.
- Planning your children’s future and securing their educational or other needs.
- Minimizing your expenses and avoiding strain or delay regarding your assets.
- Choosing a beneficiary for your financial rights.
- Important elements in estate planning
- Probate Avoidance
- Provisions for beneficiary
- Mediating and conciliation
One should get complete knowledge of estate planning from an estate planning professional to create a will or trust and have the wishes known.
There is an update of a will annually, and the principal can add or change the will anytime when living and functioning. Estate planning has many myths, but one must consult either an estate planning professional, advocate, or lawyer to get a better and deeper understanding of it.