Uncover Six Practical Steps in Our Comprehensive Guide

Thinking about mortality can be difficult, but planning for the future is essential. After a lifetime of building wealth and gathering valuable assets, it’s important to consider what happens to them when you’re no longer able to manage them. Creating an estate plan lets you legally specify your wishes and makes certain they’re carried out properly. It also helps prevent family disputes and keeps your financial affairs private. If you haven’t started yet, consider these six key estate planning steps to protect your family’s future and preserve your assets.

Step 1: Make a List of Your Assets and Debts

The first of the estate planning steps we’ll share here is to take a basic inventory. Create a list of every asset you own and put it in writing. This should include account numbers and contact information for financial institutions, as well as the names and numbers of your trusted advisors. Next, do the same with any debts you owe. All of this summary information on what you own and what you owe should be kept in a secure location, along with copies of any important documents related to them. You should also provide a copy to the executor of your will. This summary could be on paper, though it is best kept in a digital file also.

Step 2: Consider All Contingencies

We are all hopeful that we will enjoy health and longevity and live to a ripe old age, but we must consider every possibility. This is why you’ll need to consider what would happen to all of your assets, including any property, if you were to pass away today without completing these estate planning steps. It’s equally important to devise a strategy for the scenario where you experience incapacitation. This ensures that your family can manage your affairs seamlessly, sidestepping the need for a potentially protracted and expensive visit to probate court. Additionally, bear in mind the necessity of documenting a plan for generating income in the event of disability or covering medical expenses for any required care.

Step 3: Take Care of Your Heirs

For some, the primary objective in undertaking these estate planning steps is to secure the financial well-being of their loved ones, particularly their children and grandchildren. Your estate plan can include such provisions, including plans for guardianship of your minor children if you and your spouse pass away before they reach age 18. If you wish to provide financial security for loved ones with special needs, you’ll be best served by working with a financial advisor to carefully avoid jeopardizing their existing eligibility for government benefits. You might look into a special needs trust as one option in this scenario.

Step 4: Protect Your Own Interests

Another of the most essential estate planning steps involves safeguarding your assets for your heirs, while mitigating taxes and reducing expenses, too. This may necessitate specific strategies for the transfer or disposition of distinct assets, such as a family business, investment properties, or stocks. It’s common to utilize tools such as permanent life insurance and trusts to protect assets and make certain your future financial goals can be met.

Step 5: Put the Details in Writing

Be aware that if you’ve taken these estate planning steps but failed to get the details of your wishes down in writing, your work may have been in vain. Legal documentation is the sole avenue through which you can guarantee the precise fulfillment of your wishes. Ensure thorough inclusion of details such as assigned beneficiaries for life insurance policies and retirement accounts and verify the accurate titling of substantial assets like vehicles and property. It’s imperative to maintain an up-to-date will for the distribution of your assets, a living will that outlines your end-of-life preferences, and designate powers of attorney for both financial matters and healthcare decisions.

Step 6: Designate Fiduciaries

The above estate planning steps can be useful, but even a flawlessly designed estate plan may be compromised if the selection of fiduciaries – those entrusted with executing your plans – is overlooked. Fiduciaries typically include family members or close friends, but in some cases, professionals such as attorneys or bankers may also assume these responsibilities. You should appoint an executor of your will, a trustee for your assets, a legal guardian for dependents, and a power of attorney. Not only do you need to choose these individuals, but you also need to make them aware of your wishes and be sure they agree to act in a fiduciary capacity for you. If they do, make them aware of the location of any pertinent estate planning documents.

Would You Like Professional Guidance on These Estate Planning Steps?

Creating an estate plan is important for everyone, no matter your age or where you are in your financial journey. Whether you’re just beginning to build wealth or have accumulated significant assets, following key estate planning steps helps make sure your wishes are respected and your loved ones are cared for. Keeping your estate plan up to date is essential in preserving and managing your assets effectively. If you need guidance, working with a financial advisor can provide valuable support as you navigate these estate planning decisions.

At Chapman Private Client Services, helping you meet your financial needs – now and into the future – is our first priority. Contact us today to begin a conversation!