There are key elements common to estate planning success.
Preparing an estate plan is no small task.
It requires action, knowledge, and attention to detail.
When people underestimate the important of estate planning, they can cause problems for themselves and their loved ones.
According to a recent Bankrate article titled “Estate planning checklist: 3 key steps to making a successful plan,” people should create a checklist of key estate planning elements.
What are these key elements?
Start planning early.
Many people mistakenly believe it is okay to put off creating an estate plan.
This is a dangerous belief.
Death and incapacity can strike anyone of any age.
As my maternal grandfather would say, “the old must die and the young may die.”
Designate a guardian for minor children.
Young children are another reason to create an estate plan without delay.
With a last will and testament, you can nominate who will rear your children if you and your spouse die, leaving them orphaned.
We know about that in my family.
My maternal grandmother lost both of her parents to the Spanish Flu epidemic one week apart in 1919.
She was a toddler.
Failing to create an estate plan or include a guardian means a judge will select someone to take care of your children.
The decision could significantly impact your children for the rest of their lives.
Talk to your executors about responsibilities.
An executor is also designated through your last will and testament.
Choosing an executor is one of the key elements of estate planning.
This role carries with it a lot of responsibility.
The executor must administer your estate through the probate court while following the instructions of your last will and testament.
Because this role requires significant time and energy, your executor should be aware of the requirements and agree to the role now rather than later.
Who do you want to inherit your assets when you die?
Answering this question is one of the key elements of estate planning.
If you have children, you may want to provide for them.
Because minor children cannot inherit directly, you will need to establish a trust.
What is a trust?
A trust is a legal planning established under a last will and testament or a revocable living trust for the purpose of holding and managing assets for it beneficiaries.
You can establish rules for how distributions are to be made to or for the beneficiaries until they reach certain ages or meet specific requirements.
Even if your children are not minors, a trust can protect young adults “from” squandering wealth from an inheritance.
In addition, a trust can continue to protect the inheritance “for” them.
Think potential divorces, lawsuits, and bankruptcies.
Update your estate plan.
Estate planning is not something your can do once and forget about it.
Tax laws change both at the federal and state level quite frequently.
Similarly, family dynamics do not remain static.
Your income or your relationships may change.
For these reasons, it is wise to review and update your estate plan every few years.
By addressing these key elements of estate planning, you can rest in the knowledge you have take appropriate steps to protect everyone you love and everything you have.
Reference: Bankrate (July 23, 2021) “Estate planning checklist: 3 key steps to making a successful plan”