Creating a Secure Estate Plan: A Step-by-Step Guide

Estate planning is an important process for ensuring that your assets and properties are distributed according to your wishes at the time of death. Learn more about creating an estate plan with this step-by-step guide.

Creating a Secure Estate Plan: A Step-by-Step Guide

Retirement plans, such as 401 (k) workplace plans and individual retirement accounts, are an important part of estate planning. A financial agent, or simply “agent”, is authorized to make financial decisions on behalf of the principal who executed the Power of Attorney (POA) document. Unlike a healthcare agent, a financial agent gains power as soon as the POA document is signed. The appointment of a financial agent is an important step because it means that the principal's estate will be taken care of even if he becomes mentally or physically incapacitated.

A financial agent exercises a great deal of power; therefore, the director must appoint a person of trust. A Power of Attorney (POA) is a legal document that gives another person the ability to make financial or medical decisions on your behalf if you become incapacitated. Such decisions may include liquidating investments to pay medical bills, administering your insurance and, in the case of a medical power of Attorney, making sure you receive the medical care and interventions you want. Financial and medical powers of attorney are generally two different legal documents and it may make sense to name two different people.

Your Will is a crucial component of your estate plan. This important document has two distinct purposes: first, it describes who will receive your assets after your death; second, if you have minor children, it indicates who will be their guardian. Without a Will, a Judge is likely to make both determinations. You should trust that this person will make pragmatic and thoughtful decisions on your behalf.

It is recommended to review your estate plan every 2 to 5 years and update it after important life events, including marriage and remarriage, divorce, births or adoptions, and deaths. Changes in your financial goals, the purchase of large assets such as a home, or major financial events such as bankruptcy, retirement or the sale of a business are also important milestones that warrant a review of your estate plan. If you've decided you don't want to deal with estate planning alone, there are several ways to find a qualified estate planner. Once your will is finalized, signed, testified and notarized, you'll want to make sure your estate manager receives a copy.

One of the main benefits of living trusts is that the assets contained in them do not have to go through probate but rather pass directly to the beneficiaries. It's important to contact every life insurance company you hold policies with to make sure your beneficiaries are up to date and on the right list. Inheritance tax is collected only by states but both federal and states can collect estate taxes. You can also write a letter of instructions to leave step-by-step instructions as well as explain your personal wishes for things like your funeral or what to do with your digital assets such as social media accounts.

We divide the estate planning process into steps geared towards proper asset planning in a simple way. Estate planning is the process of establishing how your assets and properties will be distributed at the time of your death. There are many tasks to perform and documents to be executed to ensure that a person's estate is taken care of after their death or if they are unable to make decisions on their own. You should review your estate plan every few years every time you experience a life-changing event or if Congress makes any changes to the estate tax law.

Professionals will also be aware of changes in legislation and income tax laws which could affect their legacies. Consider working with a financial advisor if you need help setting up an estate plan or managing legacy money. Having a complete and secure estate plan when you die will leave your loved ones in a much easier place.

Duane Meno
Duane Meno

Amateur zombie geek. Avid coffee aficionado. Proud web trailblazer. Unapologetic food guru. Incurable pop culture evangelist.

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