Estate Planning Guide: Ten Simple Steps to Peace of Mind

If you’re like many people, one recent event made you rethink your approach to end-of-life decisions: the COVID-19 pandemic. One survey revealed that of the Americans with a will, around 26% got one because they were worried about the effects of the pandemic.

Sitting down to plan your estate is never easy, particularly in times of stress. If you’re one of the 62% of people who don’t have a will, knowing the basics of estate planning can offer great peace of mind.

That’s where we come in. If you’re just starting to consider the process, our simple estate planning guide can help. Read on to get started.

1. Set Goals

Before you begin your journey, it’s crucial to understand that estate planning looks different for everyone. Your situation and your goals will dictate every choice going forward, so it’s a good idea to take some time to define what you want to do.

Here are some of the most common estate planning goals we see:

  • Creating a last will and testament
  • Providing for loved ones
  • Choosing guardians for dependents
  • Making requests about health care or senior care
  • Planning for incapacitation or long-term illness
  • Making end-of-life arrangements
  • Minimizing taxes
  • Protecting assets that should pass to your heirs or spouse
  • Setting up charitable donations
  • Setting up an estate trust for beneficiaries
  • Outlining what should happen to your business

Once you’re clear on your goals, an experienced estate planning attorney can help guide you to the right strategies.

2. Take Inventory

Your attorney will have plenty of questions about your current financial situation, so be sure to organize your finances and take inventory before your first meeting.

Make a list of your assets, including any land, real estate, and vehicles. You’ll also need to consider any cash you have in various checking, savings, or investment accounts, as well as any life insurance policies. Last, don’t forget to include any personal valuables, such as artwork, antiques, and collections.

In addition, you should come prepared with a list of your current debts. This includes things like loans, mortgages, and credit card balances.

3. Discuss Your Decisions With Your Loved Ones

There’s a reason the plotlines of countless works of fiction involve secret reveals of a person’s will: it creates drama. In real life, no one wants to be blindsided by the contents of your estate plan.

Before you begin writing yours, have a conversation with your loved ones about what you want to happen upon your passing. You and your spouse, for example, should be on the same page about the division of your assets or your end-of-life wishes. If your children are old enough, you should talk to them about who you want to name as their guardian.

In addition, you should talk to the people you want to name as your executor, power of attorney, or fiduciary. These people should understand their role far ahead of time!

4. Choose Your Team

There are plenty of DIY financial planning solutions available online, but these always come at a cost. Creating your own financial plan will require significant research as well as a pretty hefty time investment, not to mention the fact that your family members may pay (literally) for any mistakes you make.

An experienced financial advisor who is also a Certified Financial PlannerTM can help quarterback your estate planning team of professionals (attorney, accountant, etc.). Your financial advisor can help you understand how to keep your loved ones protected—no matter how complicated your situation is.

5. Create a Last Will and Testament

Even if you decide you don’t need complex estate planning services, creating a will is an absolute must for any adult over the age of 18. This document can save your family a lot of headaches after your passing, even if you feel you don’t have many assets to your name.

A last will lets you communicate your wishes about your estate. It also allows you to appoint guardians and divide your assets among your beneficiaries. It should also name the person who will distribute your assets.

6. Consider Additional Documents

Not all individuals will need all estate planning documents, but there are a few worth considering. Here are a few that you’ll want to talk about with your estate planner, depending on your goals:

Power of Attorney

This document gives a specified individual the power to make decisions on your behalf if you’re unable to make them. There are two types: medical and financial power of attorney. 

Revocable Living Trust

If you’re hoping to avoid probate and get your assets to your beneficiaries faster, a living trust can help. These documents can also let you minimize taxes in the future.

Health Care Directive

A health care directive should consist of a living will, which expresses your wishes about medical treatment if you’re incapacitated. It also consists of your medical power of attorney, which allows someone you trust to make medical decisions for you.

End-of-Life Plan

This plan can consist of several documents that outline your end-of-life arrangements, your wishes about organ donations, and information on how you’ll pay for funeral arrangements.

7. Prepare to Update Your Estate Plan

Estate planning isn’t a “one and done” procedure. Anytime you experience a major life change, you’ll need to revisit your plans. Here are a few common indications that it’s time to update your estate plan:

  • You’ve gotten married
  • You’ve gotten divorced
  • You’ve had kids
  • You’ve bought or sold property
  • You’ve started or sold a business
  • You’ve moved to another state

In most cases, it’s a good idea to consider any updates to your estate plan around once per year.

Make the Most of Our Estate Planning Guide

Thinking about your passing is always difficult, but knowing that your loved ones are protected can offer great peace of mind. If you’re still struggling to make decisions about your assets, the estate planning guide above can be a great place to start.

As you work to plan for the future, don’t forget that we’re here to help. Our experienced team can help you leave a legacy while protecting your loved ones. For more information on what we can do for you, contact us today.