What's In This Article?
Most people prefer not to think about their death let alone plan for it, but it’s important to make sure that your affairs are in order so your assets can be distributed as you wish and to help your family avoid certain legal complications after your passing.
Read on to discover how you can create a Will and some other steps you can take to ensure your assets are distributed to your family and other loved ones in the smoothest possible manner.
Create a Will
Writing a will is very important, as it sets out exactly how you want your assets to be distributed following your death. If you don’t have a will, set rules will determine how your assets are allocated to your surviving family. Better to spend a little time planning how the process will go rather than trusting the government to do what they think is best.
In most States, you can download the required form to create wills online, though there are typically witness and notary requirements which you have to fulfil. Failure to comply with these requirements could result in your will being voided and therefore it being unenforceable.
In many cases, you can simply write the will yourself, but if you have an especially large or complex estate you may need to enlist the help of an attorney.
Designate Power of Attorneys
Designating a durable power of attorney and a medical power of attorney allows you to give someone (usually a close family member) the ability to make important decisions on your behalf in the event you become incapable of making them.
These include decisions related to your finances and your health – and it’s important to make sure that the person you are designating is happy to be handed these responsibilities.
Update Your Beneficiaries
You should make sure that all of your beneficiaries are up to date for things like life insurance, your pension and retirement accounts, investment holdings and savings account, in addition to your will (if you already have one.)
There are many reasons why people want to update their beneficiaries, including things like having new kids or getting divorced and remarried. So, it’s important to check if your circumstances have changed to and to update your beneficiaries accordingly.
Consider the Tax Implications
Your estate will often be subject to inheritance tax when it is passed down to your surviving family members or other beneficiaries. This can eat into the total value of your estate by a considerable amount, but the good news is you can sometimes arrange your assets and estate in a way to make the handing down of them more tax efficient.
You should consult with a lawyer and a financial advisor to discuss this, especially if you have a large and complex estate with many beneficiaries.
A Quick Summary
- It’s important to make sure your affairs are in order from a legal and financial perspective so your assets can be distributed as you wish once you pass away.
- There are a number of important things you should do to ensure things are handled smoothly and your family doesn’t get caught up in any legal issues when inheriting your estate.
- For example, you should write a will to specify how exactly you want your assets to be distributed among your surviving family, friends and even charitable organizations.
- You should also update your beneficiaries for your bank accounts, investment accounts and retirement plans.
- Finally, you should designate a durable power of attorney and medical power of attorney so a person of your choice can make important decisions on your behalf should you become incapable of making them (due to worsening health, for example.)