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Are you looking for ways to ensure your estate avoids the probate process where you live?
An estimated 60 percent of adults in the United States do not have a will or estate plan! When you execute a will, you can enjoy having peace of mind that you have made your own decisions about your assets and other affairs.
But drafting and executing a will is only one part of the estate planning process.
Read on to learn 10 essential estate planning tips to help you prepare for the future.
1. Choosing an Executor
When you are drafting a will, you should consider who you will pick to be the executor of your estate.
If you have a smaller estate, you can probably appoint a family member or close friend to serve as the executor.
But for a larger estate, you may need to enlist the services of a professional manager.
It’s important to choose someone that you trust because it can be a lot of responsibility to be the executor of an estate. You need to have confidence that the person or persons you appoint will follow your wishes.
2. Create a Living Will
A living will is known as an advance directive and is an important part of estate planning.
In a living will, you can make choices that will pre-determine decisions that can arise when you experience serious health issues.
These can be unforeseeable situations that have life-changing consequences. For example, would you want to be kept alive on a feeding tube or ventilator after a serious accident?
Besides clarifying your wishes, you also take the pressure off of your designated power of attorney to make hard decisions during a moment peril.
3. Medical Power of Attorney
A medical power of attorney is someone that is tasked with making medical decisions when you can’t make them yourself.
For example, if you are involved in a serious automobile accident or work incident, you may not be in a physical or mental condition to make decisions at that time.
A medical power of attorney is someone that a treating medical professional will turn to when a decision must be made about the course of care.
When you do not have a medical power of attorney, you are at risk of putting your family members in a tough situation if they disagree about what you would want to do for yourself.
Beneficiaries are those individuals who will inherit some or all of your assets when you die.
The decision to make someone a beneficiary can impact that person’s future in many different ways. You should consider who you would like to include or leave out of your will as a beneficiary.
If you make someone a beneficiary, you can specify what that person is to receive. For example, you could state that your grandchild will receive your vehicle or a set amount of money.
Beneficiaries can be just about anyone in your life, so as you name these individuals, think about their significance to you and what you want for their future.
5. Financial Power of Attorney
A financial power of attorney is someone that has the authority to make financial decisions on your behalf.
It’s important to remember that a financial power of attorney does not necessarily have to receive the power to make all your financial decisions.
You can pick and choose what level of authority you want this person to have. For example, you may want to give someone the authority to pay your bills but keep them from opening a new savings account for you.
The financial power of attorney should also be someone you trust because of the significant impact they can have on your life given their decision-making power.
6. Business Succession Plan
Are you the sole owner of your business?
If so, you should consider preparing a business succession plan as part of your financial estate planning.
A business succession plan is a written strategy and directive for how to continue running your business in the event of your death or incapacity.
For example, who would you like to make decisions for your business? How will your business continue to operate if you aren’t in charge?
Your customers may require service that cannot be interrupted because of an unexpected injury or death. A business succession plan will help you ensure your business continues to operate smoothly.
7. Estate Taxes
When you are thinking of tax and estate planning, you must take into account the tax consequences of your decisions.
That’s because estate taxes can significantly impact what your loved ones receive once the smoke clears.
Since the area of taxes is an important part of your estate plan, you should consult with an estate attorney at Turner Law Office and a licensed tax professional.
They will have the knowledge about the laws and tax code that applies to your situation.
8. Consider Life Insurance
Life insurance is a way to help your loved ones financially after your death.
This can be helpful to your family at any time of your life, but particularly in the event of premature death.
Holding a life insurance policy can be beneficial when you are the main financial provider for your family.
9. Funeral Expenses
When you are creating your estate plan, you should also consider the cost of your funeral.
The average funeral cost in the United States ranges from $7,000 to $10,000! This can be a tremendous financial burden to your family and friends when you die.
When you pre-plan covering the costs of your funeral, you relieve some of the stressful decisions your loved ones are forced to make as they grieve after your death.
10. Safekeeping Your Documents
Once you have your estate planning documents completed, the next step is safekeeping them!
You can choose to store these in places like a safety deposit at a bank or in a fireproof safe at home.
Regardless of where you store your documents, you should tell someone where they are.
Wrapping Up: The Best Estate Planning Tips
These estate planning tips give you a solid starting point to begin planning for your future.
The idea of passing away can be uncomfortable, but making these estate decisions now can make things easier later.
Have you recently experienced the loss of someone close to you?
Check out our blog post about “How to Overcome The Loss of a Loved One!”