Estate planning involves planning for the unexpected and allows you to protect your assets and provide for your loved ones after you are gone. Most people, especially those who own a significant amount of property, should have an estate plan, whether your estate is big or small. Even with a small estate, failure to plan for disability and death can create expensive complications for your loved ones.
Some simple steps you can take to create an estate plan include:
- Make a will in which you state who you want to inherit your property and who you want to name as a guardian to care for young children should something happen to both you and their other parent.
- Consider holding your property in a living trust so your survivors won't have to go through probate court.
- Make health care directives to ensure that your wishes regarding medical decisions will be honored, should you be unable to make the decisions yourself.
- Appoint a financial power of attorney to give a trusted person the authority to handle your finances and property should you become unable to do so.
- Protect your child's property by naming an adult to manage any money and property your minor child may inherit from you.
- Name a beneficiary for bank accounts and retirement plans to make the accounts automatically payable on death and skip the probate process.
- Set up a payable-on-death account at your bank and deposit funds into it to cover your funeral-related expenses.
- Make your wishes known regarding organ donation, burial, cremation, and funeral plans.
- If you're the sole owner of a business, consider a succession plan, or if you're in partnership with others, have a buyout agreement in place. Provide your executor or attorney-in-fact with access to essential documents, including your will; trusts; insurance policies; real estate deeds; certificates for stocks, bonds, and annuities; and information on bank accounts, mutual funds, retirement plans, funeral pre-payment plans, and safe deposit boxes.