Estate planning can sound like a huge step and unnecessary for people who are not so well-to-do. But it’s incorrect to have that mindset because almost any individual who owns something of any size needs to start estate planning. Even without large assets and ownership of land, the proper designation of your possessions can ensure that your family is financially sound in the future. Read on if you want to know some basic steps to begin estate planning.
List Out Your Assets
To even begin anywhere with estate planning, you need to list out all your assets. This could include tangible and intangible ones. The tangible assets can refer big items such as houses and vehicles to small collectibles such as art pieces and antiques.
On the other hand, intangible possessions could cover life insurance policies, savings accounts, and investment stocks and bonds. You may also want to take into record your retirement funds. Thereafter, determine their values to ensure that they can be fairly distributed to your loved ones when you pass on.
Name Your Beneficiaries
Once you have your assets and their outside valuation resolved, it’s time to name your beneficiaries. This step may not be easy and could vary greatly from person to person. But it’s good to be aware of your family members’ needs in guiding your decision.
Even if you can’t come to a definite settlement immediately, don’t leave it blank. The last thing you want to do is to allow the state courts to decide on your behalf who gets your properties. Anyway, you will be able to review successors any time so that’s not a major cause for concern.
Appoint Key Legal Directives
This step is rather complex and establishes the grounds of your estate planning. Naming the recipients of your assets is not all that there is to estate planning. You will need to delegate key legal directives such as a trustee, medical care directive, and a financial authority attorney.
Just be mindful that these main legal personnel you choose have an immense responsibility in managing your financials and ultimately your life. As with all things, never put all your eggs in one basket. It’s wise to pick a different person to handle diverse aspects.
Find Out Your State’s Estate Laws and Work with a Professional
As we come to a close, know that it’s essential to be well informed regarding your state’s estate laws. In certain areas, extensive properties are subjected to estate and inheritance taxes.
To help your heirs deal with the fees, you may want to look into grantor retained annuity trust (GRAT). Such a trust can significantly reduce the taxes your successors have to pay. If all else fails, fret not. Working with a professional who knows the law inside out can help you navigate uncharted waters. You can also take this chance to clear any doubts.
Even if you think you might have nothing to leave for your heirs, there is bound to be something of value. Proper estate planning can help ensure your loved ones have something to depend on financially after you leave this world. Don’t delay any further.