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HomeLegalHow To Plan Your Estate: 11 Steps to Follow for Effective Planning

How To Plan Your Estate: 11 Steps to Follow for Effective Planning

Estate planning seems like a daunting task to many. It is a complex and difficult process that people tend to put off to a later date. However, it is better to deal with it without any delays. Planning your estate primarily involves establishing who will inherit your assets. It will also include the procedure for how you want all your legal, financial, and personal affairs to be taken care of in the eventuality that you cannot do so yourself.

Quite simply, estate planning is how you decide who will handle your responsibilities and own your assets after your death. Other than death, incapacitation might make one incapable of overseeing the workings of an estate. It also requires estate planning. Estate planning is a lot more than just who gets your money; it includes minute details and significant decisions you need to make about who will look after your properties and monies on your behalf, your minor children, and so on.

It would be best to plan your estate properly so that your beneficiaries get the assets with minimum taxes. Otherwise, your heirs may have to deal with several taxes, such as income tax, gift tax, estate tax & more. To make things easier for you, we have streamlined the process of the steps you need to follow to plan your estate properly.

11 Steps to Plan Your Estate:

A common mistake while planning your estate is to rush through the process. It results in mistakes and errors of judgment that ultimately impact your families and survivors. If you feel unsure how to deal with this yourself, consider estate planning attorneys, who will guide you and help you plan your estate most efficiently.

The following steps will help you take care of your estate planning without any complications.

1. Prepare your will

In your will, you need to state the person who will receive the bulk of all your assets or how your assets will be divided among various beneficiaries. You should also name one person as a guardian who will take care of your parental and other responsibilities in your absence.

2. Make a Living Trust

A living trust is a trust made by you while you are alive. In this trust, you select a person to be your trustee, who holds the legal title to administer the trust. You can set up trusts in the name of your spouse or your children and have trustees oversee the funds. The primary benefit of a living trust is that there are no legal battles after you are gone. Secondly, your survivors won’t have to face probate court, which is a complex & costly process.

So, creating a living trust makes things easier for everyone.

3. Health care declaration

A health care declaration is a will that gives power of attorney to a person who will make medical decisions for you in case you are unable to do so yourself.

It is best to finalize such documentation before undergoing any surgical procedure.

4. Power of attorney (financial).

In case of your death or if you are incapacitated and unable to handle your finances, a trusted person can take care of all the finances. You get to decide who this person will be by making a power of attorney for finances.

5. Property of minors.

If any of your minor children receive estate from you, you should have someone take care of it until they are adults. You can name a personal guardian for your children in your will, and that person can look after your children’s interests.

6. The beneficiary forms.

It would help if you named someone as the beneficiary for your bank accounts to put the “payable on death” condition in place. It will help your beneficiary avoid the probate processes that take up a lot of time. Fill in and file the beneficiary forms on time. They will help a lot once you are not there to take care of your loved ones.

7. Your funeral expenses.

You should set up an account for your funeral expenses at your bank. Instead of making a pre-payment which is not reliable most of the time, you should set up a payable on death account for your funeral expenses.

8. Take care of your business.

Make a succession plan which will hand over your business to whoever you wish should take care of it after you are gone. If you are not the company’s sole owner, you should consider arranging a buyout agreement to protect your interests.

9. The final wishes.

It will help if you prepare your end-of-life wishes too. Your will should also include decisions about whether you want to donate certain organs, how you want to be buried or cremated, & any other funeral wishes.

10. The estate taxation.

Sometimes, governments impose taxes on the property after a person’s death. Take all the possible steps to reduce the taxes or get the property exempted. If your estate falls under the taxable category, make sure you get it checked through an attorney. An attorney would be able to tell you about all the legal ways to get this done.

11. Take care of your documents.

You need to take care of all your essential documents once you have prepared them. The person you will choose to take care of all your responsibilities will need access to these documents. Make sure you organize the following documents properly and keep them safe so that when required, your beneficiaries can access them easily.

  • The document of your will.
  • All the documents of the trust you created
  • All of your insurance policy documents
  • Your real estate deeds & other documents
  • All the documents and information on your savings, retirement plans, and mutual funds
  • The documents covering all your funeral plans & payment processes
  • Documents that allow access to your bank accounts
  • The records of all your debts

You should keep all these documents organized so that after you are gone, your survivors don’t have to face any difficulties in accessing them.

The Bottom Line:

Real estate planning is instrumental in ensuring the well-being of your family and any other beneficiaries. Consulting legal advisors can help devise the best possible ways to allocate and dispose of your assets. You do not want to leave behind a mess for your loved ones to handle. Estate planning organizes the disbursal of assets in the manner you decide. So, everyone gets what you intended for them after you are gone. All you need to do is plan properly after careful consideration and deep thought.

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