Estate Planning is essential for all of us, regardless of your age or health. The only certainties in life are death and taxes. Every year, we are reminded of the importance of paying taxes. However, we rarely think about death until a loved one or a family member passes away. However, the reality is that it has an impact on every one of us individually.
Most people don’t get their estate planning done because they don’t know where to start. Or even see a need. However, estate planning, even if uncomfortable, is a must. And while the title of this piece may seem a little shocking, these are indeed five things you should ensure you do before you die.
Estate Planning 1.
Make a List of Vital Digital Information
What we’re really talking about here are your usernames and passwords for all of your online financial accounts. Make a list of everything you can think of. These would include things like your online banking accounts, credit cards, PayPal accounts, Venmo accounts, and other digital or internet-based methods of transferring or moving money.
This would also include any non-retirement investment accounts, money market accounts, or other sorts of investments you have. If your family is unaware of these things, they will be unable to access them. If this is the case, it’s possible that the funds in these accounts will never be used by your family or loved ones, since they have no idea where they are or how to get to them.
Estate Planning 2.
Organize Non Estate Assets
This brings us to your non-estate assets, such as any life insurance and retirement accounts you may have. These assets are not part of your estate since they are governed by the contracts you signed when they were acquired. Your life insurance policy, for example, will have allowed you to choose a beneficiary. This beneficiary is entitled to the proceeds of your life insurance policy if you die. Rather than transferring the funds to your estate, the life insurance provider will pay them directly.
Contracts also have influence over retirement accounts and some annuities. However, none of these accounts will be transferred to your beneficiaries unless they are aware of them and can file a claim with the firm in charge of their administration. Having a list of all of your non-estate assets, as well as information on who is administering them and contact information, will make collecting these funds easier for your family.
Estate Planning 3.
Choose Who Should Assist You While You’re Alive
The documents you can create to protect and provide for yourself while you are alive are perhaps the most crucial aspects of any written estate plan. These include a durable power of attorney, a health-care power of attorney, and a living will. You have the option to provide explicit instructions about what you want and don’t want in these documents. You can also name those who will be in charge of looking after you if you are unable to do so yourself.
If you don’t have these documents, your family will be required to file a guardianship and conservatorship petition in court. The court will decide who will be appointed to protect and provide for you during this process. This could result in a legal battle between family members over who should be nominated, which could be very costly. Even if everything goes smoothly and everyone agrees on what needs to be done, this process is still several times more expensive than simply completing your estate plan.
Estate planning 5.
Choose Someone To Take Care of Your Estate After You Die
Similarly, your last will and testament, which allows you to name a personal representative, is an important aspect of your estate planning. This individual is in charge of completing the probate process, paying all of your bills and expenses, and distributing your money, property, and other assets to the beneficiaries you specify.
When you die without a written Will, the courts dictate who can be designated as your personal representative and who becomes your beneficiaries automatically. To put it another way, you lose the power to make these choices on your own.
Keep Your Estate Plan Up to Date
Finally, the most crucial thing you can do once you’ve finished your estate plan is to make sure it’s up to date. Life has a tendency of getting in the way. We all go through important life transitions. These include things like having a child or losing a loved one, getting married or divorced, changing relationships with family or friends, and moving to a new place. Any of these occurrences may necessitate a need to revise or alter your estate plan.