Preparing your estate in advance means your family will never have to tie up any loose ends after you pass, even if your death was sudden and unexpected. Estate planning is the best way to keep your worldly possessions legally safe so your family receives everything they’re entitled to.
While you’re preparing your will and trust, your estate lawyer helps you organize and allocate all your assets the way you want to. Estate planning can give you the freedom and control to make sure nothing is left behind or uncared for.
Here’s a step-by-step process of how estate attorneys help you plan your estate and make final arrangements.
Step One: Make an Inventory
The first step in planning your estate is to make an inventory of anything with value. Even sentimental items should be considered in this list. You may be surprised at what you want to include in your estate.
Remember to consider the following assets:
- Homes, land, and real estate
- Vehicles and other motorized possessions
- Collectibles, heirlooms, and antiques
- All bank accounts
- Stocks, bonds, and mutual funds
- Life insurance policies
- 401(k) and other retirement plans
- Health savings accounts
After you’ve made a list of these important possessions, it’s time to get an appraisal of your home and other possessions that may have gone up in value.
Step Two: Make a Will or Consider a Trust
While you’re planning your estate, you’ll want to discuss with your estate attorney if you should make a will or a trust.
In a will, you choose who inherits your property. If you have young children, you also choose a legal guardian. The biggest difference in a will is you name an executor or personal representative. Your will is a public record of how you want all finances to be allocated.
In a trust, your survivors won’t go through probate court. If you have children, you should still state who gets legal guardianship of them. Having a trust helps you avoid conservatorship, protects the estate from court challenges, and remains private.
In both wills and trusts, you can name beneficiaries and can protect your assets. If you need to make revisions, you can go back into both a will and a trust to do so.
Step Three: Make Health Care Directives
In the event you are unable to make medical decisions for yourself, a health care directive protects your medical wishes. This is also referred to as a “living will;” it grants power of attorney for your chosen loved one to make decisions if you cannot. Making decisions about your health early protects you if you’re unable to make medical decisions.
With a living will, you state all medical procedures you do and do not want. This means that you can also sign a “do not resuscitate,” or DNR if you go into cardiac arrest. Your estate attorney will also help you prepare a HIPAA release form at this time.
For more information on adult caretakers and what options you have, read our article below.
Also Read: Conservatorship vs Guardianship FAQ
Step Four: Find a Financial Power of Attorney
Finding a trusted person to handle all authority over your finances can be tricky. This person also will handle your finances if you’re unable to handle your affairs. The chosen person is also referred to as an agent or attorney-in-fact.
There are two ways you can go about granting power of attorney over your finances when planning your estate:
- A durable financial power of attorney is someone who handles your financial affairs if you’re medically unable to. This person acts on your behalf in legal and financial situations. Having durable financial power grants a person the ability to pay all your bills and taxes with your money if you’re unable to.
- A limited power of attorney only allows certain power over your money. This is useful for those with concerns over just a sole person having all the power over the estate. This document limits the powers of your named representative. For example, you may grant this person to pay bills and allocate money, but not to sell any stocks or bonds.
Step Five: Look At Your Life Insurance
You may or may not already have life insurance. Life insurance not only helps pay for your final arrangements but also gives your family money if you are to die from unexpected causes.
You need life insurance if you have kids or dependents, unresolved debts, own property, or own a business. Talk with your estate lawyer to see if they have someone to help you decide if you need temporary, whole, or universal life insurance.
Step Six: Handle Your Estate Taxes
Most estates won’t owe federal taxes unless your estate has an extremely high value. Married couples can transfer twice the federal limit so all assets are left to the spouse.
Some states do have estate taxes and may levy the tax based on the estate’s value. Depending on your state, you may also have an inheritance tax, which means your beneficiaries will need to pay taxes on their inheritance. Be sure to check with your estate lawyer to see if your state has these exemptions.
Step Seven: Make Final Arrangements
When planning your estate, you’ll need to make a funeral plan. During this process, you can either choose a funeral prepayment plan or set up a payable-on-death account for your funeral expenses.
Write out all your final wishes. Any final words to your loved ones along with your stance on organ donation should be explicitly stated. Finally, decide if you wish for burial or cremation.
Step Eight: Finalize and Safely Store Your Documents
With your estate lawyer and executor, go over and access your:
- Will and trusts
- Life insurance policy
- Real estate documents
- Stocks, bonds, and financial assets
- Bank accounts, mutual funds, and safe deposits
- 401(k)s, IRAs, and retirement plans
- Debts and unpaid bills
- Final arrangement plans including payment options
Keep these records organized and safely stored in a place that’s accessible. All original documents should be kept with your estate lawyer or in a bank safe deposit.
Make sure your executor understands that if someone without legal permission or ownership of the safe deposit box accesses it, they will have to go to court.
Finding the right estate lawyer can be tricky. You need someone qualified who you can trust wholeheartedly. My Case Helper works with partners across the country to ensure that all your assets are cared for and handled properly.