Today is the perfect opportunity to make decisions concerning your future. The simple actions involved in estate planning only require a handful of legal documents and a minimal time commitment. Here are ten simple tips to ensure that the estate plan that you draft in 2024 is as comprehensive as possible and ensures that your wishes are fulfilled.
Step 1 – Draft A Will
Drafting a will is essential to the distribution of your assets upon your passing. This document gives you the ability to decide exactly how the assets in your estate will be managed upon your death, while also allowing you to decide who will have the responsibility of caring for your minor children. Having a will in place allows you to avoid the much dreaded probate process, which can take years to complete. Another benefit of having a will is that it will decrease your estate taxes, as the value of the goods you give to loved ones or to worthy charities will reduce the value of the estate taxes you are subject to paying. Wills can, importantly, be easily adapted to the changing circumstances of your life.
Step 2 – Select An Executor
When drafting a will, you must select an executor to carry out the distribution plan you outline. Your executor will act on your behalf and distribute your assets, meaning this individual will be responsible for all of the legal matters in your name. This individual will be responsible for handling your personal financial affairs, including the distribution of your assets, thus you must select someone you trust to act in your best interest. Most people tend to select a spouse or child – you are, however, not limited to family members. You should select a trustworthy individual that you feel will be able to carry out their financial obligations and also someone that is in good health to ensure that they are able to complete all of the designated tasks.
Step 3 – Create A Living Trust
A living trust is an imperative estate planning tool, as it places all of your assets into one legal document for you to use during your lifetime. If you name yourself as a trustee, you will be able to manage your trust and make any changes you believe are necessary if your trust is revocable. You will have the ability to distribute your assets to the designated beneficiaries without undertaking the lengthy probate process. In the event you become incapacitated and are unable to care for your own assets, this document allows you to appoint another individual to make decisions on your behalf. You may include your estates, cars, bank accounts, and other assets within this trust while ensuring that your wishes regarding their distribution will be fulfilled even in the event of incapacitation or death.
Step 4 – Create A Financial Power Of Attorney
Once you have placed all of your assets in the trust, it is essential that you create a financial power of attorney. This document gives the agent you select the ability to make financial decisions on your behalf. The individual creating the financial power of attorney is considered the principle and the person that individual selects is considered the agent. This document is especially beneficial in the case of a medical emergency, as your agent will handle such financial matters as paying your rent while you recover. It is possible to make your power of attorney active immediately, meaning the agent has the ability of making financial decisions for you even if you are not incapacitated and are still alive. This will allow your spouse as the selected agent to make decisions while you are away or medically unwell. You also have the ability to make your power of attorney effective upon the case of a specific event taking place. This option makes you responsible for making all of the financial decisions yourself until you are physically unable to do so.
Step 5 – Complete A Health Care Power Of Attorney Document And Name An Agent For This Power Of Attorney
A health care power of attorney allows you to select an individual to make medical decisions on your behalf. This document grants that individual the ability to decide which medical facilities to place you in if you are unable to make that decision yourself. This individual can also participate in the process of selecting doctors and treatment plans in the event that you fall ill. This document is extremely imperative when it concerns making decisions about life support, resuscitation, and end of life plans. When selecting a healthcare power of attorney, ensure that your agent – the health care proxy – is trustworthy. You should select someone who knows your medical history and would be able to make the most effective decisions concerning your health.
Step 6 – Select Beneficiaries
Selecting beneficiaries is extremely important in regards to the estate planning process, as the individuals you select are the ones that benefit from the distribution of your assets. If you fail to select beneficiaries, a probate court will make the decision on your behalf. This implies that the court may select individuals who you do not want your assets distributed to and that certain individuals you actually wanted to distribute your assets to might not receive them.
Step 7 – Create a Letter of Intent
Once you have decided on your beneficiaries, you should create a letter of intent. This document entails exactly what you would like done on your behalf once you have passed. The letter of intent is given to your selected beneficiaries and they are responsible for completing the specified requests made in the document, such as specific funeral plans. It is essential to make the probate judge aware of your plans, in the event your estate requires the probate process. This document is also a substitute for your will in the event that it is deemed invalid. The letter of intent demonstrates your exact interests and wishes when it pertains to the distribution of your assets to your selected beneficiaries.
Step 8 – Establish A Guardianship For Minor Children
If you have minor children, you should sign guardianship documents for them which will come into effect in the event of your incapacitation or death. This guardianship designates a guardian who will be responsible for the children’s care upon your inception or death, and therefore should be someone you trust – though this is again not restricted to family members.
Step 9 – Outline All Liabilities
In addition to outlining your assets and understanding the value of your estate and the inheritance and estate taxes it will incur, you should also outline all liabilities. These liabilities can include mortgages, lines of credit, and other debt, and you must keep your executor aware of them because they will be responsible for paying them upon your death.
Step 10 – Be Honest With Your Beneficiaries
Once you have chosen your beneficiaries and made a concrete plan as to what assets you would like distributed to whom, you should make your beneficiaries and all those affected by your decision aware of your intentions. This is the best way to avoid any possible contestation of your will, as anyone unaware of your intentions might petition the probate court validating the will to declare it invalid.
For further Estate Planning inquiries, please contact the Law Office of Inna Fershteyn at 718-333-2394 to best prepare for your future by selecting an attorney that works for your best interests.
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