When Mark Twain said that only two things in life are certain, death and taxes, he should have also added estate planning to that list. Only 33% of Americans have prepared for their demise through proper estate planning. That means 67% of folks don’t have any plans, leaving all their estate inheritance plans up to others or the state.
If you are planning an estate inheritance, then there are some things you can do to make it a smoother process. Read on to find out what those steps are, so you can make this process of estate inheritance as easy for your heirs and loved ones as possible.
Start by Assembling a List of Your Assets
The first thing you will need to do to start planning an estate inheritance is to know what exactly you wish to gift or transfer over to your loved ones after your death. No one wants to think of such dire things while they are still alive and well, but going through this process will help your loved ones greatly once you do pass.
Make a list of everything you own in as much detail as possible. If you have properties out-of-state or out of the country, then you must include these with as much information as possible so your loved ones don’t have a hard time finding these far away assets.
You don’t want to do a shoddy job of this first step. Otherwise, your heirs will get sent on a wild-goose chase after your death, where they will try to decipher the mystery that is your list of assets.
In addition, you might have assets like Cryptocurrency or some other digital assets. It’s an interesting time we live in, to be sure. Don’t forget to include these assets in your list as well, and give details on how they can access your online accounts or digital wallets when you pass on.
And a List of Your Debts
You will also need to create a list of all your debts. You might have paid off your mortgages and other loans, so that’s all well and good. But if you haven’t, then you will want to include this list in your estate planning.
This list of debts is crucial because it will give your inheritors a clearcut view of what your assets look like and what their inheritance looks like in turn.
Interestingly enough, over the next decade, millennials (born after 1980) are set to inherit a whopping $68 trillion from their baby boomer relatives. That’s a lot of cash that will be exchanging hands. But if the estate inheritance planning isn’t done right, there will also also be a lot of money that’s lost during this exchange.
If you don’t want this to happen to your children or loved ones, then make sure to create your two lists of assets and debts properly. Bring in an accountant or a bookkeeper if you are having a hard time figuring this out on your own.
Draft a Will (Use an Estate Lawyer)
Try to avoid the DIY wills that a lot of folks are espousing online. Not only can this be tricky if you have a lot of precious assets in your estate, but it can also be contested easily in courts if it came to that.
Get an estate lawyer who’s knowledgeable and experienced in terms of estate and inheritance law. This way, you can rest easy knowing that your will and estate planning has been done without any faults or errors.
You don’t want a small or big mistake in your documentation to cause your heirs to miss out on their inheritance. They could be counting on it to help them get out of debt or pay for their children’s college education.
Make sure you are clear about how you want your estate to be passed down to your loved ones. Add percentages or other figures to delineate how the distribution of assets should proceed. The clearer you can be, the more likely it is that there will be no estate disputes.
Appoint an Executor of Your Will and Estate
Hopefully, you have a trusted person in your family or extended circle that you can appoint as the executor of your will and estate. This is an important decision and should not be made lightly.
This person will administer your estate according to the wishes stated in your will. Make sure the person has the time and availability to execute such a function. And also that they are skillful enough and lucid enough to perform such a task.
Most people end up choosing their spouse for this task because that’s the most convenient choice. But it doesn’t necessarily have to be your spouse. It can also be a trusted friend or another member of the family.
Have an in-depth conversation with the person you choose to ensure they understand their role and that they are up for it. Some folks might not want to get entrusted with such an immense task due to other responsibilities or perhaps due to fear of doing something wrong.
Living Trusts Are an Underused Tactic
If you don’t want your inheritors to deal with the delays included within probate, then a living trust is a great alternative that’s underutilized by Americans. When a person dies, usually what happens is that their assets must pass probate before the will gets validated and distributed over to the heirs.
This probate period can be exorbitantly long and annoying, especially for your heirs who might need the cash asap to pay off debts or buy a business. That’s why using a living trust gets recommended by estate lawyers frequently.
With a living trust, you don’t have to wait weeks or months to pass on your assets. You can ensure assets are transferred directly to loved ones after your death. But make sure you hire an estate lawyer to do this for you since it’s a complicated law and shouldn’t be trifled with by amateurs.
Review Your Estate Plans Regularly
As time passes by, the will that you wrote out 5 or 10 years ago (or longer) might not answer your wishes properly. Some of your heirs might have passed away, or some of your assets or debts might have changed in value or been sold off.
That’s why it’s important to review your will and the details of your estate planning regularly. Ideally, you would be doing this once a year. This way, you will know exactly what your will or last testament contains and if you wish to change anything or update any details.
Also, don’t forget to store your estate planning documents properly. Either you will want to store it with the executor of the will or with an estate lawyer. This way, even if your house goes up in a fire or if you lose all your documents from your hard drive, you won’t have to worry about losing your will and estate plans.
Avoid Estate Disputes
Despite all your careful planning, estate disputes do happen. But they can be avoided or at least reduced greatly by following all the steps above. There are also some other things you can do to avoid estate disputes, like:
- Simplify your assets and debts as much as you can
- Draw up the correct documents and put the right details into your will
- Enlist an experienced estate attorney to help you out
- Communicate with everyone regarding your will, so people are aware and ready
- Preplan your estate inheritance as much as possible
- Make sure your will and estate plans are notarized
- Write a letter of instruction along with your will
- Have backups of your final estate planning documents
If you are feeling overwhelmed by all this already, do not fear. This isn’t something you need to get done in a day or two. Most folks will take weeks, if not months, to draft up their final will and complete their estate planning.
But that’s the reason you must start now. If you delay your estate planning any further, it might end up being too late, and your loved ones will have to deal with the repercussions. Make it easy for them by taking all the steps above.
Estate Inheritance Isn’t Something to Avoid or Delay
You are a busy individual. That’s a given. But there are certain things that are non-negotiable and that you should make a priority no matter how many other items are on your plate.
Estate inheritance planning is one of them. Your heirs who will inherit an estate from you will appreciate the effort and time you spend on estate planning.
If you are looking for some help with estate planning, estate administration, or long-term care plans, then we are here to help. Don’t hesitate to contact us today so we can clarify any questions you might have about estate planning.