A last will and testament isn't the only way to leave a legacy. Estate preparation entails more than just writing a will. Accounting for all of your assets and ensuring that they move as easily as possible to the person or entities you desire to receive them is what thorough planning entails. Along with putting your strategy into action, you must ensure that people are aware of it and understand your goals. Are you unsure where to begin? You'll have covered most, if not all, of your bases if you follow this checklist.
Organize Your Inventory.
To begin, go around your home, both inside and out, and compile a list of any valuable stuff. Television sets, jewelry, collectibles, autos, art and antiques, computers or laptops, lawn equipment, and power tools are all examples. The list will almost certainly be far longer than you anticipated. You may wish to make notes as you go if someone comes to mind who you'd like to inherit the item when you pass away.
Take Stock of Non-Physical Assets.
Start adding non-tangible assets to your list next, such as paper assets or other rights that are contingent on your death. Brokerage accounts, bank accounts, life insurance policies, and other policies such as long-term care, homeowners, auto, disability, and health insurance are among the items included here. Include any account numbers, as well as the whereabouts of any physical papers you may have. You might also wish to include contact information for the companies that are in charge of these intangible assets.
Make a list of your debts.
Make a separate list for any open credit cards or other debts you may have. Auto loans, mortgages, home equity lines of credit, and any other obligations you may have should all be included. Add account numbers, the location of signed agreements, and the contact information for the debtor firms once more. Include all of your credit cards, keeping track of which ones you use frequently and which ones you keep in a drawer unused. It's a good idea to check your credit report for free at least once a year. This will also reveal any credit cards that you may have forgotten about.
Make a list of your memberships.
Make a list of any groups you are a member of, such a veteran's organization, a professional accrediting organization, or a college alumni club. In some situations, these organizations may offer (at no cost) accidental life insurance to its members, and your beneficiaries may be entitled to receive benefits. Any additional philanthropic organizations that you support should be listed as well. It's also a good idea to let your beneficiaries know which charity organizations or issues you care about and where you'd like donations made in your name.
Make duplicates of your lists.
When you're through, date and sign your lists, and create at least three copies. Your estate administrator should get the original. If you're married, the second copy should be delivered to your spouse and kept in a safe deposit box. Keep the last duplicate in a secure location for yourself.
Examine Your Retirement Funds.
When you die, accounts and insurance with chosen beneficiaries will go immediately to those persons or entities. It makes no difference how you direct the distribution of these accounts or insurance in your will or trust. The beneficiaries designated on the retirement account will take precedence. For a current list of your beneficiary selections for each account, contact your employer's customer care team or plan administrator. Examine each of these accounts to ensure that the beneficiaries are up to date and listed precisely how you want them. If you've divorced and remarried, this is very vital.
Maintain Your Insurance Coverage.
Life insurance and annuities, like retirement assets, will flow straight to beneficiaries. It's critical to contact all of your life insurance providers to confirm that your beneficiaries are up to date and listed appropriately.
Transfer on Death Designations should be assigned.
Assets left in a will, as well as assets left intestate, frequently go through probate. This procedure, in which your assets are dispersed according to court orders, may be expensive and time-consuming. Every day, however, numerous accounts, including bank savings, CD accounts, and individual brokerage accounts, are probated needlessly. If you own these accounts, you can set up a transfer on death (TOD) designation, which allows beneficiaries to receive assets without having to go through the probate procedure. To establish this up on your accounts, contact your custodian or bank.
Choose a Trusted Estate Administrator.
When you die, your estate administrator or executor will be in charge of carrying out your wishes. It's critical that you choose someone who is responsible and in a decent mental condition to make decisions for you. Don't jump to the conclusion that your marriage is the best option. Consider how the emotions surrounding your death will effect this person's capacity to make decisions. Consider other qualified folks if you anticipate a problem.
Write a Will.
Every adult over the age of eighteen should have a will. It's the manual for distributing your assets, and it might save your heirs a lot of grief. In addition, a will might select a guardian for small children and specify who should care for your pets. You can also give property to charity organizations in your will. Wills are very affordable estate-planning papers to draft; depending on the complexity of your assets and your geographic location. With the help of internet sites or other software tools, you may easily draft your own will. Make sure you sign and date your will in the presence of two non-related witnesses who should also sign the document, as well as having it notarized. Finally, make sure other people know where the document is so they can get to it when they need it.
The worst enemy of estate planning is procrastination. While no one wants to think about dying, failing to plan may result in family feuds, assets falling into the wrong hands, lengthy legal battles, and an excess of money spent in estate taxes. So choose a time to begin. "By neglecting to prepare, you are planning to fail," said Benjamin Franklin.