Estate Planning Basics
Get the estate planning basics covered, and you’ll reduce some of the burden on your loved ones when the time comes. Because let’s face it, we’re all going to die someday.
Estate planning doesn’t have to be expensive either. If you’re in the U.S., your state’s probate court almost certainly has information on requirements specific to your state — things like whether or not a handwritten will is admissible, how many people have to witness a will, etc. Of course, it’s always a good idea to consult an attorney that specializes in estate planning to make sure that you haven’t forgotten anything or to have the plan itself created.
Don’t put off estate planning because you don’t want to think about death (who does?) or because you think your estate is so small that it won’t matter. Think of estate planning as a gift you can give the people who loved you that are left behind. Don’t leave them with a headache and uncertainty about what you would have wanted.
At a bare minimum, you’ll want to get these items taken care of:
- Create a will and let the executor know where to find important documents
- Create a health care directive
- Name a guardian for your minor children, if you have any, after making sure the potential guardian is willing to serve
- Get adequate life insurance if you have dependents (term insurance is usually inexpensive)
- Be sure your beneficiaries on accounts and insurance are up-to-date
You may also want to consider doing one or more of the following things:
- Creating a trust, if it would be beneficial in your situation
- Setting up a durable power of attorney
- Stating your final wishes (Are you an organ donor? Do you want your body to be buried, cremated, donated to science, etc. or are you ok with any of the above?)
- Creating a plan for what will happen to your business, if you’re a sole proprietor
Once you’ve gotten your estate plan in place, review it once a year to be sure that none of your preferences have changed and to update any information that’s gotten outdated. One day your loved ones will look back gratefully on the preparation you did — and they might even be inspired to get their own estates in order as a result.