If you are like many people, you don’t have an estate plan, or perhaps you made one years ago and haven’t looked at it since. This is an important task, but it is one people often avoid because they think it will be expensive, difficult or they simply do not want to think about it. However, it is important to do this in order to protect yourself, your assets, and your family. Knowing the main documents that you are likely to need can help you get started on this task.
Wills and Trusts
A will is one of the basic documents every estate plan needs. You can use a will to say who you want to leave your car, home, and other assets to. If you have children who are younger than 18, you can also name guardians for them. There are also situations in which you might want to use one or more trusts. Trusts can protect assets for minors and allow you to specify when and how beneficiaries receive assets. They also have many other uses. You may want to work with an attorney in creating these and other estate planning documents. Although there is do-it-yourself will and estate planning software, an attorney can talk you through your specific situation, help you decide which documents you need, and help you prepare them.
Life insurance can be an important element of estate planning, especially if you have children. In order to decide how much coverage you need, you should think about what will be needed to support them for as long as they are minors or until they finish college. Once your children are adults, you may decide you no longer need it. One benefit of a life insurance policy that many people do not realize is that they can get a substantial amount of cash for it through a life settlement. This can net you more money than surrendering it, and you can get your instant valuation through dawnlifesettlements.com. This money could go toward retirement or other costs.
When you bought your life insurance policy, you probably filled out a beneficiary designation to say who you wanted the money to go to. You probably did this if you have a retirement account from work as well. These documents are part of your estate planning as well. Unfortunately, people often forget about them, and this can lead to mistakes like retirement assets going to an ex-spouse. Be sure that you review them periodically and update them after any major changes in your life or family.
Estate planning is also about making sure you have a plan in place in case you become incapacitated. You can use powers of attorney or other documents to name people who can make medical and financial decisions for you if you are unable to. This can also give people access to your accounts to pay bills or take care of other matters if they need to. You may also want to create a document that specifies the kind of medical care you wish to receive.