Checklist for a Successful Estate Plan – Planning for the end of your life involves forming an estate plan. This plan will make your wishes known about who will receive your assets, administer your estate and serve as guardian of your children on your death. Your estate plan communicates your wishes about life-sustaining health care treatment as well.
Once you start thinking about your assets, you may find that you have more than you think you do.
Tangible assets to consider for your estate plan include:
- Homes, land and other real estate.
- Vehicles — cars, motorcycles and boats.
- Collectibles — art, antiques, trading cards, stamps and coins.
Intangible assets include:
- Checking and savings accounts as well as certificates of deposit.
- Stocks, bonds and mutual funds.
- Life insurance policies.
- Retirement plans such as 401(k) plans and individual retirement accounts (IRAs).
- Health savings accounts.
- Ownership of a business.
Let’s consider some of the documents your estate plan most likely will contain:
- Your will — Provides instructions for the transfer of your assets. Appoint someone you trust as the executor of your estate. This person will see that your wishes are carried out.
- A living trust — Distributes assets and designates portions of your estate to go to loved ones and/charities. Your selected trustee can take over should you become ill or incapacitated. Trust assets transfer to your designated beneficiaries, bypassing probate, which is the court process that may otherwise distribute property. One use of a trust is to provide funds for minor children who cannot inherit money directly; it provides them with funds and ensures a responsible person manages that money.
- Power of attorney — Designates someone to manage your assets, make legal decisions on your behalf and work with doctors to make medical decisions while you’re living; it doesn’t require a guardianship. You can direct that person to act on your behalf immediately or only when you’re no longer able to make decisions yourself. There are different kinds of power of attorney. Work with legal professionals to find out which one is right for you.
- Advance directive or living will — Allows you to make your wishes known regarding life-sustaining treatment like resuscitation, ventilator use, tube feeding and other end-of-life decisions if you can’t communicate. Make sure your instructions are readily available to responsible parties should the need to reference them arise. You also can give a trusted person medical power of attorney for your health care, giving that person the authority to make decisions if you can’t.
- Beneficiary designations — Designate the person to whom proceeds from life insurance, annuity contracts, retirement accounts and pensions will pass. These will be included in the plan documents. Your will and other documents may spell out your wishes, but they may not be all-inclusive. It’s important to remember that beneficiary designations can outweigh what’s in a will.
Ensure that all your assets are transferred seamlessly to your heirs on your death. Consult an attorney or an estate tax professional to help you create a successful estate plan to give your family members access to or control of your assets should you become unable to do so yourself.
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