It’s never fun to think about death, especially your own, but estate planning is extremely important. It’s unpleasant but by planning ahead and getting your affairs in order, it makes it much easier for your loved ones to move on.
The worst thing you can do is avoid it completely. Having no plan means you default to how your state handles probate, which means the judicial process makes decisions for you.
Here are the ten estate planning tasks you need to perform before you die:
1. Create A Will
This is the cornerstone of every estate plan. By creating a will, you ensure your assets go where you want them to. It also names guardians for any minor children you have and takes away any legal confusion because it codifies your wishes. Without a will, state laws will take over and the state will decide what happens.
You do not need to hire an expensive attorney to draft a will, you can do it yourself with inexpensive online will services or download software. The most important thing is to get one done as soon as you have assets.
2. Establish A Living Trust
A living trust gives you the opportunity to transfer assets to others without going through court. You can keep control of the trust while you’re still alive and upon your death, the assets go to the beneficiaries. This is very useful for complex estates because it speeds up the process.
Unlike a will, which you can do with software, you will want to work with an attorney to set up a trust.
3. Set Power Of Attorney
There may come a time when you will not be able to make decisions for yourself and that’s when a power of attorney becomes important. You could be incapacitated or unable to act on your own but still need someone to make important decisions for you.
This person will be able to do things on your behalf so you want to choose someone who is both trustworthy and responsible and, of course, willing to do so. Also, you can have multiple powers of attorney, which can be useful for breaking up responsibilities.
4. Set Healthcare Power Of Attorney
This is separate from a regular power of attorney. A healthcare power of attorney is a specific role that gives them the right to make medical decisions on your behalf. You want this person to know your wishes with respect to treatment, life support, and quality of life.
5. Create An ICE Binder
An ICE binder is an “In Case of Emergency” binder that captures all of your important information in case something happens to you. This includes all the estate planning documents but could also be letter and notes to individuals that may not fit with other legal documents.
The idea is that you want some documents that will explain your wishes even if they are not legally binding. It can help your loved ones navigate your life in ways that exceed that of a will.
6. Plan For Digital Assets
This is a more modern concern but what do you want to happen to your digital assets such as social media accounts, email, and others. These are often paid services so you’ll want a plan in place or risk the default result — deletion due to nonpayment of the subscription.
You’ll want a list of all your accounts, perhaps as part of your ICE binder, as well as a way to access them and what you wish to happen to them. Also ask your best friend to clear your browser history.
7. Plan For Long-Term Care
As we live longer, long-term care becomes a greater concern and you’ll want to plan for it. If you don’t, you may be saddling your family with a very difficult decision when it comes to paying for it.
Look into long-term care insurance, Medicaid planning, or putting aside a big chunk to pay for it. You can add these instructions to your estate plans or lean into insurance policies that offer it.
8. Explain Your Funeral And Burial Preferences
Burial or cremation? That’s a challenging question that most people don’t discuss or include in their estate plan. Even if you don’t have a preference, set one because it will make the lives of your loved ones so much easier. I’ve been to too many funerals where people said they did not know what the decedent wishes so they were forced to choose.
9. Talk To Your Family
Make sure you talk to your family about your wishes in addition to codifying them in your estate plan. The plan will establish what will happen but it’s important to talk to your family about it so they understand your reasoning and thinking on various decisions you’ve made. You don’t have to cover every nitty gritty detail but communication is very important.
10. Review Your Plans Regularly
Finally, make sure you review and update your plans on a regular basis. Be sure to do so after any major changes but also annually just to double check everything is in order. The plan is only as good as as it is up to date.
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