Estate planning is what you do when you want to establish who your assets go to when you die or are otherwise incapacitated.
Well-thought-out estate plans ensure that your beneficiaries receive all the assets you want them to have while paying minimal taxes. Here is how to prepare your estate plan.
Create an inventory
While you might think that you do not have enough stuff to justify an estate plan, you will probably surprise yourself with how much you have. To get an idea of what you have, create an inventory. Make sure that you list all of your homes, land, real estate, cars, motorcycles, boats, collectibles, artworks, antiques and other valuable possessions.
Think about your family
Once you know what you have, decide what you want to happen to all of your stuff and ensure that you take care of your family from beyond. Do this by writing a will, ensuring you have enough life insurance and naming a guardian for your minor children.
State your beneficiaries
Your will is just the basics of estate planning, and you want to make sure you have your beneficiaries in order by:
- Making sure your retirement plans and insurance accounts are accurate
- Make sure everyone you name gets the right stuff
- Put a beneficiary for all of your items
It is also a good idea to name contingent beneficiaries in case something happens to the ones you name before you die.
It will take a lot of effort to prepare your estate plan, but it is worth it. It means that you are avoiding the biggest mistake of all, which is not having a plan at all.