Did you know that 67% of Americans have no documents, guidance or plan in place for when they die? This means that their families will have to rely on the government and probate process to determine who gets what.
If you want to determine your beneficiaries and their distributions and save money on estate taxes, you need an estate plan. These are a few things you should include.
If you have minor children, the most important thing you can do is to choose who they will live with if you become incapacitated or die. Choose individuals who share your values and views and have the financial stability to raise your children. Ask them if they are willing to be your kids’ guardians.
Next, write your will. Discuss which beneficiaries receive the properties or assets that you have not previously designated, e.g., in your trust. Include your guardian and backup guardian designations.
Insurance and financial beneficiaries
Every financial asset you have likely allows you to designate a beneficiary. Therefore, contact your insurance companies, banks and other financial institutions and tell them who will receive these assets upon your death.
A revocable or irrevocable trust allows you to pass assets to your heirs while you still live. You retain power over these assets until you die. This saves significant money in estate or inheritance taxes. You can place all your major assets, including real estate, vehicles, financial assets and artwork, in your trust.
Powers of attorney
You need several powers of attorney, including individuals you trust to make financial, legal and health decisions for you if you become incapacitated.
Although most people think a will is all they need, this is only one part of a comprehensive estate plan.