What is Estate Planning?
Estate planning is the process of designating what will happen to everything you own and deciding who will handle your responsibilities after you’ve passed away or if you are incapable.
Your estate plan appoints authority to trusted individuals to make medical, financial, and legal decisions on your behalf when you can’t. This legal process creates a binding document to confirm that your wishes will be honored.
Another goal of estate planning is to help minimize estate tax, gift tax, income tax, and other taxes for the beneficiaries.
Estate planning is so much more than the process. It is an act of love to your beneficiaries. Not having an estate plan in place can leave your loved ones with a stressful mess to clean up while they are grieving.
It’s also an act of legacy.
Estate planning allows you to think about your legacy, and how you want to be remembered.
Now there is A LOT to consider when developing your estate plan. So, download the Estate Planning Guide to help you think of everything that needs to be in your estate plan!
Estate Planning Guide
Completing the Estate Planning Guide will walk you through almost everything you need to get started on your estate plan. This guide covers information about you, your spouse, your family, appointments (people you designate responsibility to), and your assets.
The first step to estate planning is to just gather all your information into one document.
Which is sometimes the hardest part to do!
Thinking of ALL your assets on the spot is a challenge. And deciding who to designate responsibility to is also something you, and your spouse, may want to sit on for a while.
The good news is the first three sections of the Estate Planning Guide should be easy to complete!
So, let’s break down the steps to starting your estate plan –
1. Gather Family Information
Like I said,
This part should be easy. Which is why it’s the best place to start!
Getting the ball rolling is the most difficult part, so starting with an easy task will give you the momentum to finalize your estate plan!
In these first three sections –
- Information About Yourself
- Information About Your Spouse
- Information About Your Family
You will build the Estate Plan with basic information about you and your family.
Easy questions will be in each section, like full name, date of birth, social security numbers, marriage information, children, grandchildren, and special needs children.
The hardest part of this section will probably be getting your spouse’s social security number and gathering the addresses of the children if they are all grown.
That’s not too bad, right?
Easy enough?
Great! Let’s move on!
2. Appointments
Now maybe this section will be easy for you as well.
Maybe you’ve already given some thought to who you trust to take care of your responsibilities when you pass. If you haven’t ever considered who would take care of your family, assets, and other responsibilities after you’ve passed;
Then you may want to ponder on this for a few days, maybe even a couple of weeks. Find a healthy balance between making this decision a priority and not letting it completely stress you out.
If you are married, this should be a discussion between the two of you for the next few days. Really give it some thought and discussion for 30 minutes to an hour each night.
Once you have officially decided who your appointees are, and you are 100% comfortable with adding their name(s) to your Estate Planning Guide –
Then you need to plan a discussion with them.
Of course, this can wait until you have your entire estate plan decided. But do plan on having a discussion with your appointee(s).
Letting the people you trust know ahead of time is the best possible thing that you can do for them. You will set them up for success in honoring your legacy and taking care of your responsibilities.
You will also decrease the stress that will be handed to them in the midst of their grieving. Lessening your loved ones’ stress during the grieving process is the greatest gift you could ever give them.
No matter who you are, the rest of the inheritance won’t compare to that gift of communication that you can give while you are still here.
3. List Your Assets
Now here’s the tricky part.
Listing all your assets can be overwhelming. Especially if you don’t have any prior lists of your combined assets.
Starting this list as soon as possible will help your mind flow with all the potential assets you have. This process may be a few days, or a few weeks, or a couple of months.
Once the list is started, if an asset comes to mind then you just add it to your list!
The asset list is a work in progress, but getting it started will make it easier for you to build and add to it.
The Estate Planning Guide has different categories of assets to help you easily build your list, like –
- Bank Accounts
- Investment Accounts
- Real Estate & Mineral Interest
- Life Insurance Policies
- Business Ownership Interests
- Gifts of Specific Assets
- Etc.
Just to be clear on the life insurance policies, this is listed as an asset on your estate plan only.
While you are alive your life insurance is NOT considered an asset when figuring your net worth. Life insurance becomes an asset to your estate after you pass.
Awesome, you did it! You completed the Estate Planning Guide!
However, there are a few more steps.
Thankfully, the final steps are rather easy – you’ve already completed the hardest steps!
4. Gather Corresponding Documents For Estate Planning
Now that you have your Estate Planning Guide completed, it’s time to start building your legacy file!
Storing all your estate documents together is incredibly helpful for your estate process.
Some important documents to store here are:
- Life Insurance Policies
- Other Insurance Policies
- Real Estate Deeds
- Vehicle Titles
- Marriage License
- Divorce Papers
- Partnerships or business agreements
- Usernames and Passwords
Once you have this file built and stored in a secure place, make sure the appointee(s) of your estate or executor of your will knows where to find it!
Also, once you finalize your legal estate planning paperwork this will need to be filed in the same place.
5. Consider Meeting With An Attorney
You are so close to being done with your HUGE step toward building your legacy!
Estate planning is different for every person. Some estate plans are simple and straightforward, while others are a little more complex.
If you believe yours is simple, then you should be able to complete your estate plan online without meeting with an attorney. You can create a legal will through Mama Bear Legal Forms.
Mama Bear Legal Forms is partnered with Ramsey Solutions. It is $129 for just you (if you are single) and $198 for you and your spouse. Click the link in our blog to apply our discount code, BTY20, for 20% off your will!
If your estate is complex, meaning it’s a decent size or there are family concerns. Then it is best to meet with an attorney.
Meeting with an attorney will allow you to secure your estate, develop a plan to avoid estate taxes, and help you understand your state’s laws.
If you need to meet with an attorney, don’t put it off. Make it a priority, and get the appointment scheduled!
6. Family Meeting
Now that your estate plan is finalized it’s time to meet with the fam.
At the risk of sounding like a broken record…
Communication is KEY!
Your loved ones need to know what the plan is. This is the GREATEST gift that you can give them. Is the gift of what you want in your estate, and how you want it to be given.
Nothing is worse than loved ones that are left behind trying to decide what you would have wanted them to do with your assets and responsibilities.
Having these decisions made for them ahead of time can ease their comfort in the grieving process.
Because they KNOW they are making the decisions that you would have wanted them to make.
That peace of mind is the best asset you will ever give.
I won’t deny that it’s going to be a difficult discussion at first. You and your loved ones may cry because no one wants to think about a life without their loved ones.
But the difficult discussions are the ones that we need to have the most.
If you have a decent-sized or complex estate, you may want to consider having an annual (or more frequent) family meeting to discuss the plan.
7. Update Regularly
The hard part is done!
But that doesn’t mean that your estate plan can just sit back and collect dust now.
Your estate plan will need some maintenance throughout the years.
Whenever you go through major life changes you NEED to update your estate plan.
If you make it a habit to review your estate plan on an annual basis you will easily catch items in your plan that need to be updated.
Some major life changes include marriage, divorce, having kids or grandkids, selling or buying a business, and moving to another state.
If your estate plan is complex, reviewing it on an annual basis will also give you the perfect opportunity to discuss with your attorney any legal or tax changes that can impact your plan.
Estate planning doesn’t have to be complicated or time-consuming. Don’t look at the process as a whole. Just take it one step at a time! Hopefully, the Estate Planning Guide helps you and your family create a plan that best suits you.
Don’t get overwhelmed, just focus on making your estate plan better than it was yesterday!
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