Create a will. Wills should be signed and dated. A will outlines any specific wishes about who should receive certain belongings. It also serves to appoint an executor for the will and a specific person as a guardian for minor children if desired.
Make a trust. Trusts keep assets safe from probate courts and creditors. If certain assets will be left to survivors, putting them in a trust will ensure that named heirs receive them. Trusts can be revocable or irrevocable.
Set up advance directives. Most people know whether or not they want to be resuscitated or kept alive on life support. Health care directives serve to specify wishes about breathing assistance, feeding tubes and other life-saving measures. Also, a person can name a health care power of attorney. This individual can legally make decisions about life-saving treatments.
Appoint a financial power of attorney. In the event of a person becoming mentally incapacitated or dying, a financial power of attorney can make decisions about all finance accounts. This individual can handle tax matters, property sales and more.
Buy ample life insurance. Life insurance should at least cover final expenses such as debts and funeral costs. Both working and stay-at-home spouses should have life insurance to replace income or the cost of child care. Some people also opt to include enough funds for survivors to live on comfortably for several years, to pay off a mortgage or to pay for a child's college education in the future.
Protect the property of children. If children will inherit money, it should be left in the care of a responsible adult with instructions for distribution. Also, it can be put into special funds for regular disbursement.
Name a beneficiary for financial accounts. By naming a beneficiary for bank, life insurance, savings and other accounts, the funds automatically become payable to that person upon the death of the account holder. This means that the funds will not be tied up in an expensive and long probate process.
Learn about estate taxes. Over 99 percent of estates will not owe taxes. Those who have an estate worth $5.4 million or more should discuss strategies with a financial planner.
Make final plans in advance. One of the most frustrating experiences for grieving family members is trying to plan a funeral quickly. If all plans are made in advance and the funeral is paid for, this eliminates a great deal of stress. It is free to make plans even if the individual does not pay for the funeral in advance. Also, make wishes about organ donation known.
Protect business interests. People who own a sole proprietorship or are part of a partnership should make a succession plan and form a buyout agreement. This protects surviving family members and other business owners.
Be sure to store all documents in a safe place. However, they should not be kept a secret from everyone. If they are in a safety deposit box or a locked cabinet, be sure that one or two other trusted people have access to the files. Let beneficiaries or will executors know of their status and where to find documentation. Discuss estate planning options with your trusted agent at 314-351-HALO(4256).