Statistics indicate that almost 71.6% of Americans don’t have an up-to-date will. If you are part of this statistic, you may want to correct this as soon as possible. Sitting down with attorneys and planning your estate will help prevent your family from going to war over your assets.
Estate planning gives you a chance to say what must happen to all your belongings after you pass. It also involves leaving instructions about who will be responsible for decision-making when it comes to your health and finances if you were to become legally incapacitated at some point in your life. Read on to find out about the basics of estate planning.
Take an Inventory of Your Belongings
Most people tend to think that they don’t have a lot of belongings. Therefore they don’t set aside time to plan their estate. However, if you look around, you may be surprised by how much you own. Take the following into consideration when taking inventory of what you own:
- Your home(s), land, and real estate
- Any other collectibles and belongings
- intangible assets like bank accounts, stocks, insurance policies, bonds, and mutual funds
- Business ownership.
Establishing Durable Powers of Attorney
A will usually comes into play after you pass away. However, it will not help what happens with medical decisions and other financial decisions before you pass away. For those purposes, you will need medical and financial powers of attorney.
Financial power of attorney enables a named individual to execute financial decisions in the case that you are alive but unable to make those decisions. For instance, if you fall into a coma, this individual will pay your mortgage, taxes, and different bills on your behalf.
Drafting a Will or Living Trust
Estate planning can not be complete without a will. Your will contains all your instructions, and it directs how assets titled in your name will be shared among your loved ones. The process of drafting a will is different depending on location and local state laws.
There are also costs involved when preparing a will. You may need to hire attorneys, pay executor commissions and court costs. Preparing a will can take anywhere from a few months to two years or longer.
You can consult attorneys if you are not sure about the process of estate planning. Working with someone who is knowledgeable on the subject will make everything easier.