For those with significant assets, planning for what happens to your property and family after you die is important to avoid taxing burdens and to protect future generations. But even those with a modest net worth generally have good reasons to make sure their estate plans are solid and strong. A legally binding inheritance plan allows you to determine exactly how your property should be distributed, reduce the possibility of family disputes, ensure that your young children are cared for, and avoid unnecessary and lengthy litigation. A valid plan is just a map you leave for your family to live without you. Here are seven steps to ensure you’ve prepared a legacy of certainty and stability for your loved ones.
1. Make a Valid Will
This is a harsh reality, but most of us know that having the will is necessary. You need a will to ensure that your chosen heir will receive the assets you specifically want to leave. If you do not create a valid will before you die, your property will be distributed according to state investment laws. In most states, that means your children and spouse will share all of your assets and inheritance. If you are unmarried and have no children, your assets will automatically pass to other blood relatives even if you want a friend to accept them.
2. Build Living Trust
Another way to create a secure housing plan is to set up a living trust. If your property is held in a living trust, your heirs will be able to go through the costly and time-consuming process of probate court.
3. Set Health Care Instructions
It’s also important to consider your personal health care desires. Having instructions prepared for your treatment is important if you are incapacitated and unable to make medical decisions on your own. Establishing health care directives such as living wills and medical powers of attorney gives your chosen one the power to make decisions for you.
4. Appoint Financial Power of Attorney
For your finances, consider appointing a durable power of attorney that will give someone you trust the authority to control your property and finances if you can’t afford it. This person will handle all of your finances and is usually referred to as a lawyer or agent.
5. Name a Personal Guardian for Minors
You must also appoint a trusted adult to manage any property or money your young children receive from you. This same person is usually also the personal guardian you designate for your children in your will.
6. Select Recipient
Selecting a beneficiary for your bank account is also a good idea if you want the account to be automatically paid to the beneficiary when you die. This will save money by allowing the funds to pass probate.
7. Complete Funeral Fees
Lastly, you can save your loved ones additional stress if you make your wishes official as far as whether you prefer cremation or burial. You can also set up a prepayment plan or an account in your bank that will cover the funeral expenses.
Planning ahead by following these simple steps ensures that you will leave a legacy of security and stability rather than undue chaos and stress.