Estate planning is something everyone should do, regardless of your social status or current income. It is an unfortunate misconception that only people who have a certain amount of wealth need to go through the process of planning their estate. By focusing on estate planning, you are able to figure out where your property will go when you pass and protect your family. Here are the important steps involved in planning your estate.
Make Your Will and Trust
To start with, you must have a will. This is one of the first things you need to prepare. If you have minor children, you should include who you would like to become their legal guardian if you die. You also want to state who inherits your property, being as specific as possible with different property you own, from your land and home to the money in your bank accounts and your valuable jewelry. You can also consider putting your property in a living trust. This allows your family to gain ownership of it more quickly instead of having to deal with probate. In both cases, a lawyer will be able to help you make the appropriate plans.
Select a Power of Attorney
There are two types of power of attorney you need to select: one that makes medical decisions for you when you are no longer able to and a financial power of attorney that handles your finances. The medical power of attorney should be someone you trust who can make your important medical decisions and go along with your wishes. As for the financial power of attorney, it can be the same person or someone different. Choose someone who is able to handle your affairs, including your finances and property, if you become unable to.
Name a Beneficiary
In order to allow someone to take over your bank accounts and retirement plans immediately, you also need to name a beneficiary. This will be payable on death, which means the funds avoid the probate process, and your loved one will have instant access to your accounts. You can also register specialty accounts to your beneficiary, such as brokerage accounts, stocks, and bonds. Many people choose a spouse to be their beneficiary, but you can also choose an adult child, sibling, parent, or another person who you are close to.
Make Funeral Arrangements
It may seem morbid to arrange your own funeral, but by prepaying for some of these services, you take the burden off the shoulders of your loved ones. Not only do they not have to worry about the financial aspect, but the emotional aspect as well. It also gives you the opportunity to choose what services you would like after your passing. You can prepay for the funeral or memorial service, the cremation or burial, and the casket.
For more information about estate planning, contact McFarland & Masters LLC or a similar firm.