Many people get overwhelmed by the prospect of estate planning and put it off until later in life. But this is a mistake.
The truth is that the earlier you plan your estate, the better. After all, you never know what could happen in the near future. As they say, any day could be your last.
Having a comprehensive estate plan is one of the most important things you can do for your loved ones. Most people are unsure how to plan for their estate.
That’s why estate planning checklists are so helpful. Keep reading to find out how to plan an estate.
What Is an Estate Plan?
Everything you own, including your house, car, furniture, personal possessions, and investments are all part of your estate. Although estates may differ in size or value, everyone has one.
We’re all going to die one day and, unfortunately, we can’t take our possessions with us! An estate plan gives you control over what happens to your estate when you pass away.
An estate plan is a collection of legal documents. These documents provide instructions for how you want your assets to be handled and to whom they should go. A good estate plan includes other important things as well.
For example, you can include instructions for your care if your health deteriorates. You can also name a guardian for your children and an inheritance manager. A proper estate plan can also help minimize taxes, court costs, and processing fees.
Importance of Estate Planning
Having a comprehensive estate plan can make your loved ones’ lives much easier in the event of your passing. An estate plan is crucial for ensuring that your assets are managed and distributed properly.
A good estate plan can help you feel more confident about the future. With an estate plan, you can get peace of mind knowing that your loved ones will be taken care of when you’re gone.
Failing to draw up a comprehensive estate plan can create unintended complications for your family and descendants. Keep reading to avoid making any estate planning mistakes.
Last Will and Testament
A will is a legal document that explains where you want your assets to go. In a will you name an executor who is responsible for distributing your possessions. A will ensures that your property is distributed to your chosen beneficiaries.
The courts must validate your will before it can take effect. Once approved, the executor of your will can begin administering your estate. Having a well-written will can save your loved ones a lot of hassle.
Do you have complicated issues like step-children, a business, property in multiple states or do you want your family to avoid probate court when you die? Then a creating a trust is essential.
A living trust becomes operational immediately after creation. When you set up a trust you give another person or institution power over your estate in the event of your incapacity or passing.
This person/organization is called a ‘trustee’. Once you pass away, the trustee can distribute your assets. While you’re still alive, you may also make changes to your living trust if you want to.
The advantage of a trust is that it allows you to avoid probate court. Note that trusts can be expensive to set up and manage.
For certain assets, you can designate a beneficiary to receive them after death. You don’t have to give up your current ownership rights as the property will only be transferred when you die.
Beneficiary designations are often done for bank accounts and other financial assets. Some states (not Georgia) allow this for real estate, vehicles, and other possessions too. Beneficiary designations do not need to be dictated in your will.
Any beneficiaries that you name should be over 21 years of age and mentally competent. If this is not the case, the court may get involved. If your beneficiary passes away, the court will decide where your assets go.
Financial Power of Attorney
A financial power of attorney gives someone the power to manage your finances if you become incompetent to do so.
A financial power of attorney either becomes effective immediately or after a specified future event. This depends on the wording of the document.
The person who awards the POA is called the ‘principal’ and the person who has the POA is called the ‘agent’. The authority given to the agent ends once the principal dies.
Georgia Advance Directive for Healthcare
A Georgia Advance Directive for Healthcare designates another person to make healthcare decisions on your behalf in the event you’re unable to. This person is usually a spouse or family member.
If you want to create an Advancce Directive, you should choose someone you trust. Choose someone who would recommend a course of action that you would agree with. It often helps to discuss your medical views with this person beforehand.
You can also designate a backup agent. This person will receive the healthcare power of attorney in the event that your chosen agent is unable to act.
Picking a suitable guardian for your children in the event of your passing is important. Some wills and trusts incorporate guardianship, but some don’t.
This important component of estate planning is often overlooked. Choose a person or couple that shares your parenting views. They should also be willing to raise children so speak to them first.
It’s also important to choose someone who is financially stable. As with your healthcare power of attorney, you should also name a backup guardian just in case.
Estate Planning Checklists Help You Plan For Your Passing
Nobody wants to think about death, but the truth is that we’re all going to die one day. Taking the time to create a comprehensive estate plan can make your loved ones’ lives a lot easier in the event of your passing.
Estate planning checklists help you to know what you need when drawing up your legal documents.
We have been helping people plan for their estates since 2006. Our approach to estate planning is innovative and client-centered. Are you ready to start planning your estate? Contact us today.