One of the biggest mistakes that you can make in life is to not have a proper estate plan that tells your family and other loved ones what should happen to your assets when you die. “If you don’t have an estate plan, instead of people knowing what you want, you force people to guess,” says Chas Rampenthal, general counsel at LegalZoom, an online company that provides its customers with customized legal documents. “That guessing can be the cause of a lot of pain, a lot of strife. Your estate plan is one of the single biggest acts of love you can do.”
Too many people pass away without writing down their wishes. Perhaps talking about your mortality is uncomfortable, or maybe you don’t think that you have enough to worry about having an estate plan. You may be right about feeling this way, but leaving your family to deal with probate could take months or even years to resolve.
The last thing you want to be remembered for is not planning appropriately. Doing these simple things below is not hard and can be done in a short period of time, thus giving you peace of mind now that your affairs are in order.
1. Name beneficiaries on all of your accounts
Every bank, brokerage, and investment account that you own can be passed directly to individuals in order to avoid the costs of probate. This is done by naming beneficiaries for each of those accounts.
Gather together each account statement that you have, find the phone number to their customer service line, and make the call.
After you get through to someone, ask, “Who do I have listed as my beneficiaries?” The customer service representative will be more than happy to tell you who you have listed, and if there are accounts that need beneficiaries or they need to be updated, they can assist you with the best ways to accomplish that.
If there are forms to fill out, ask, “Can you prefill those forms for me?” Many times, they can, which will make it easier for you when they arrive in the mail.
Do this for each of your accounts, and if you need to consolidate smaller accounts together, find out how to do that instead.
2. Create a simple will
A will, or a last will and testament, is for all of the other assets that you own where you cannot name beneficiaries. Your will covers what happens to your car and your house if you live alone, and everything in it, including your clothes and furniture. If you have a special heirloom that you wish to give to your brother, then include that in your will.
One of the most important parts of a will is naming an executor or executrix, who becomes the person in charge of ensuring that everything that you own is dispensed of properly. While a will must go through the probate process, many states have alternatives to full probate when the dollar value of your estate falls below a certain threshold. These alternatives are less costly and less intrusive than full probate, so be aware of those alternatives and provide written instructions on what your executor must do to fulfill their responsibilities.
3. Consolidate your assets together
I mentioned consolidating your assets earlier, and it bears repeating and further explanation. Over your lifetime you may have accumulated different accounts, such as 401(k)s or bank accounts. If you have moved from one location to another at any time in your career, you probably accumulated a variety of accounts, small or large. Consolidating them together makes it easier for you and your heirs to manage, and they will thank you.
4. Establish a Durable Power of Attorney
A Durable Power of Attorney (DPOA) is a legal document where you name an Agent to step into your shoes so that they can act for you. You will outline certain powers and responsibilities that they must follow, such as opening and closing accounts, dealing with the IRS on tax matters, and naming beneficiaries, just to name a few.
The laws in your state will dictate what needs to be included in your DPOA document in order for you to confer those powers to your Agent, so it is a good idea to consult with an attorney if you wish to limit or provide specific powers related to your assets.
If an attorney is not an option for you, then there are many places online where you can download forms to establish a Durable POA. While these cheaper alternatives may be more affordable, state laws are always changing, so it might be better for you to pay the extra money for an attorney to draft a DPOA that will give you peace of mind.
5. Store your important documents in a safe place
This might seem obvious, but many people fail to store their important documents in a place that is both easy to access and safe from intruders or a disaster. We are all just a storm away from having our homes exposed to the elements, so in order to quickly recover from a disaster, make sure that you store them in a fireproof safe or at another location, such as a bank safety deposit box or at a friend’s house in their fireproof safe.
Such important documents include those that we have already talked about above, i.e. wills, trust and DPOA documents, etc., but they may also include account statements, previous tax returns, or business documents that dictate who will run your company when you pass. Anything that would create a significant hardship to recover should be included.
Make sure that your family knows where these documents are stored so that they can be accessed quickly in an emergency.
Acting on each of these simple steps will prepare your estate to be easily managed when that time comes, and if you need legal assistance with any of these items, a qualified estate attorney can help.
For a limited time, at Lawson & Breuder, we offer a free 30-minute consultation where we discuss at a high-level any issues about your estate. We will then come up with a game plan to move forward.
There is no obligation, and I promise that you will come away from that consultation knowing what your next steps are to financial security.
So call us now at 817-821-8120 and ask for a free 30-minute consultation. Our staff will set up an appointment with you to visit with one of our certified estate attorneys at a time that is convenient for you.
P.S. When you call, don’t forget to ask about our complimentary guide entitled “How to avoid the 7 most common pitfalls of retirement.” This report is made available to all of our callers, absolutely free, even if you are unable to schedule an appointment at this time.
You owe it to yourself and your family to put your financial affairs in order, so call us today at 817-821-8120.
We look forward to hearing from you soon!