Estate planning can feel like just another item to put on your already lengthy to-do list. This can make it difficult to get to, especially considering the fact that it requires some legal education on your part and confrontation with your mortality. As a result, estate planning can quickly fall down the list of priorities. But if you’re reading this post, then you realize that estate planning is important. Without it, your assets and decision-making about your health and finances can fall into the wrong hands. Your estate can also wind up facing enormous probate and tax-related costs without proper planning.
Therefore, now is the time to create your estate plan. While it may seem like a daunting process, there are ways to break it down into more easily digestible pieces. Let’s look at some of them here so that you have a better idea of how to effectively tackle your estate plan.
The first steps you should take to create your estate plan
There are so many decisions to be made during the estate planning process that it can quickly become overwhelming. But instead of trying to take on the whole process at once, you should think about taking it step-by-step, starting with the following:
- Conduct an inventory: Before deciding how to dispose of your assets and writing down an asset distribution scheme, you should take inventory of your estate so that you know what you’re working with. By doing so, you’ll have a better sense of what assets you’ll want to leave to certain individuals. This gives you a strong starting point for creating an effective estate plan.
- Identify your family’s needs: There’s a lot that can be accomplished through estate planning. But to choose the estate planning vehicles that are right for you, your estate and your loved ones, you have to identify your family’s needs. For example, if you have a loved one who needs to secure a college education, then you can create a trust and condition the release of trust assets on the completion of a college degree. Or if you have a loved who needs help controlling their spending of an inheritance, then you may want to utilize a spendthrift trust that restricts what assets are released at periodic increments.
- Think carefully about your beneficiaries: In many instances, evenly dividing an estate amongst loved ones makes sense. But that isn’t always the case. In fact, there may be changed circumstances that warrant modifying an existing estate plan to ensure that your assets don’t end up in the hands of an individual who mismanages their inheritance. So, think carefully about who you want to inherit from you and to what extent.
- Identify any directives you may need: Estate planning isn’t just about leaving assets to your loved ones. It’s also about preparing yourself for the possibility of incapacitation and any anticipated long-term care costs. Once you identify your potential needs, you can seek out estate planning vehicles that will lay out the directives necessary to protect your best interests.
Know how to create an estate plan that meets your needs
There’s a lot that goes into the estate planning process. You need to know how to navigate it to your advantage if you want to protect your finances, your interests and your vision of the future. That’s why now is the time to learn as much as you can about the estate planning process and what it can do for you.
