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The initial steps to take when creating an estate plan

On Behalf of | Oct 13, 2021 | Estate Planning

You did not dive into creating an estate plan, rather you carefully planned every step. From personal research and reviewing your assets to determining beneficiaries as well as an attorney to guide you. Ideally, you want every detail in place.

Good for you for taking the initial steps toward creating an estate plan and organizing your financial affairs. Doing so spares your loved ones from the aggravation of having to deal with it. Whether you are single, married, a parent, childless or just starting out in retirement, it is essential to have an estate plan in case you die or become incapacitated and can no longer make decisions.

Lists of assets and beneficiaries

Remember that if you die without an estate plan, the state decides what happens with your assets. Your estate is everything you own and includes assets such as your home or condo, savings accounts, mutual funds, life insurance, retirement plans, clothing, personal property, vehicles as well as debts.

Among the first steps to take when creating an estate plan include:

  • Making an inventory: Your inventory should not only include a list of all your property and assets, but a list of your family members and others whom you plan to name as beneficiaries. This gives you a better idea as to what you own. It also will help you understand the personal needs of your beneficiaries, thus helping you determine what and how much to leave them.
  • Contacting an attorney who will help you create your will: Not just any attorney will do. Work with one who specializes in estate planning. This person will help you organize your estate plan, provide crucial insight and explain your options.
  • Reviewing the list of beneficiaries: Making beneficiary designations is important pertaining to your retirement plans and life insurance policies. Such designations override any directives found in a will as these assets go directly to the beneficiary, avoiding probate.
  • Leaving a letter: Since certain things may not belong in a will, it is a good idea to create a letter with additional instructions. The letter may contain details related to funeral arrangements as well as directives pertaining to items of sentimental value that you wish to leave specific heirs. Give this separate letter to a trusted person.

These are all solid steps to take when assembling an estate plan. Ultimately, you gain peace of mind.

Going in the right direction

Everyone should have an estate plan. Procrastination is not uncommon as some people need a little nudge to get started. It is OK to take baby steps when it comes to estate planning. However, just make sure those steps are going in the right direction.