Estate planning involves getting your affairs in order, including handling your property, assets, and funeral arrangements. Here are some of the essential steps for planning your estate, allowing you to define whom your property goes to and which people you trust with your money and assets.
Choose Your Beneficiaries
The first thing you should do is choose the people that will oversee your estate if you pass or are unable to make certain decisions. You want to name a beneficiary who will take over the money in your accounts, receive benefits from your life insurance policy, or receive other payments following your passing. This is often a spouse or child, though it can be anyone you choose. You should also choose a financial power of attorney, who will handle your finances if you are unable to, such as due to a severe medical situation. A health care directive is also chosen, which lists the person who will make your healthcare decisions if you can't.
Write Your Will
Include a written will, even if you go with a simple one. This is an important step of the estate planning process because it helps to avoid having your property go through probate. If you list what property goes to whom in the will, your loved ones don't need to deal with the probate process at all. It also helps to protect your children by not only putting aside money for them but also deciding who will have custody of them after you pass.
Define Where All Property Goes
Also keep in mind that some of your property won't be included in the will, so you need to have special instructions for this property. For example, the proceeds from your life insurance won't go through your will. You need to select a beneficiary for this account. You may also need to have different instructions for property like retirement accounts and real estate that you own with someone else. If you own a car with your spouse and both of you pass, there should be instructions on who it goes to next.
Plan for Final Arrangements
It is also a good idea to make some of your own funeral arrangements now. This helps your family know exactly what you hoped for in regards to a funeral and burial arrangements. You can even prepay for some services, such as buying your casket or paying for your funeral plot. Visit a local funeral home to discuss options as far as pre-arranging goes. They will keep record of these preferences and inform your family if you pass.