Estate planning is not as overwhelming as most people think it out to be if done correctly. It is instrumental in ensuring your wealth is distributed the way you want after your death. The last thing you want is your hard-earned wealth falling into the wrong hands.
In this article, we are going to look at the vital steps a local estate planning law firm will take you through for a successful estate planning process.
Let us delve into specifics.
- Know your worth
The first step to estate planning is to know how much you are worth. This process involves adding all your assets, including your property, cash, retirement benefits, life insurance plans, and many more, then subtracting all your liabilities, including loans and mortgages. Once you have done this, try to determine whether or not your estate is subject to federal estate taxes.
- A will or a Revocable Living Trust?
With the help of a reputable estate planning lawyer, you can determine whether you need a will or revocable living trust. The lawyer will guide you on the pros and cons of each in regards to your situation, to make sure you make the best decision.
- Create a plan for when you die or become mentally incapacitated
Estate planning without a proper disability plan will most likely put your assets in a court-governed guardianship, where the loss of property is a possibility. Additionally, you have to decide who inherits your property in the event of death.
You are also required to make arrangements for where the cash for the funeral arrangements will come from. The same applies to estate tax bills in case your properties are taxable.
- Select your fiduciary
Fiduciaries are an integral part of the estate planning process. These are people entrusted in carrying out your wishes as per your will or revocable living trust. As such, it is advisable to choose a fiduciary wisely. One who you trust to do as you wish. Otherwise, your beneficiaries might be unhappy, probing the court’s intervention.
- If you went for a revocable living trust, fund it
The first step to this is to title your property in the trust’s name and make your beneficiaries aware of life insurance policies. The above, also applies to any retirement benefits you are entitled to.
Funding your revocable living trust is, in most scenarios, a lengthy process. In the best-case scenario, it takes a few weeks to a few months. However, a great attorney might speed up the process.
- Regular updates are vital
The estate planning process does not stop at that. The importance of regular reviews and updates cannot be downplayed.
Changes, for instance, the death of a beneficiary, divorce, additional children, and remarriage, do happen in the course of life. All of these situations, good or bad, have an impact on an estate plan. Also, the people you trusted might change and adopt unpleasant traits. As such, the importance of regular reviews and updates is undeniable. Otherwise, the perfect estate plan today might be suitable for a few months or years to come.