Planning for the management, transfer and division of your estate upon your eventual death or disability is not something many people consider until it’s too late. Estate planning is an essential thing everyone should do, regardless of the current value of your assets or where you’re at in life. This is why establishing and following an estate planning checklist is extremely vital for your future.
The goals of estate planning are to avoid any hassles or confusion, reduce costs and to minimize time spent in probate court – or avoid it altogether. It is wise to have an attorney specializing in estate planning to work with you on this process, due to the often complex nature of the process. Below is a checklist covering the general things to include when forming your estate plan.
Inventory Your Estate and Assets
While many people might not consider themselves to be wealthy with a massive estate, almost everyone has assets that can be inventoried and counted as part of your estate. These include vehicles such as cars, motorcycles, boats, etc. as well as things like collectibles and items holding sentimental value. Real estate is also one of the things that should be counted in an inventory of assets for the estate.
Once you inventory your assets, you will need to determine their value. This can be done via outside valuations for certain assets like an appraisal of your home, or financial statements from your accounts. For assets that cannot be accurately valued, you will want to put the value on them that the heirs of the assets would likely place on them. This will help make sure that your assets will be distributed as equitably as possible amongst your heirs.
Plan for Your Family
Planning for the welfare of your family after your death or disability is an important part of estate planning. It is recommended to look into life and disability insurance to make sure that your family can be taken care of when you are no longer able to. This should cover them financially to the point where they can continue to keep their lifestyle as they were when you were providing for them. This also would include those whose lifestyles are dependent on dual incomes.
Another thing that is important when planning for your family is the care of any minor children or adult children with disabilities that you may have under your care or guardianship. This can be done by naming both a guardian and a backup guardian for these children. It is important to have a backup in case the primary guardian is no longer able to care for the children.
You will want to document your wishes as to the care of these children as it cannot be guaranteed that the guardian or even the courts will have the same ideas and goals in terms of child-rearing and care.
Set Up Necessary Documents And Directives
Directives are an important part of a comprehensive estate plan. These directives cover medical and financial matters, detailing your wishes as to who receives power of attorney in certain situations. It is important that you consider these directives carefully as they can give someone control over decisions relating to your financial and physical well being in the event you are unable to make those decisions yourself. Below are the most common directives in estate plans:
- Medical care directives – These lay out your wishes for medical care if you become incapacitated and are unable to make those decisions on your own. It is also possible to give someone you trust medical power of attorney, which allows them to make medical decisions for you if you are unable to. Sometimes these two documents are combined into one, which is referred to as an advance health care directive.
- Durable financial power of attorney – This gives someone else the power to manage your financial and legal affairs if you become unable to do so. This designated person can act on your behalf in these situations as directed to in the document. This includes paying your bills, taxes and accessing and managing your financial assets.
- Limited power of attorney – For those not comfortable with the idea of turning everything over to someone else, this is an option to look into. This document limits the powers of your named representative within the guidelines you have laid out. Often this is used for signing documents on your behalf, such as during the closing of a home sale or sales of stocks.
- Trust – This is another directive option to ensure your wishes are met. With a living trust you can designate what portions of your estate go towards certain things while you’re still alive. This will still allow you complete control over your estate until you become ill or incapacitated, in which case your selected trustee will take over. Upon your death, your trustee will ensure the trusts assets will be transferred to your beneficiaries.
Consult With An Attorney
At the end of the day, planning a comfortable future for yourself and your family shouldn’t be taken lightly. Having an experienced lawyer help you through your estate planning checklist can make a major difference and help avoid potential legal issues.
If you’re looking for assistance with estate planning in Michigan, the offices of Sean J Nichols, PLLC can help you establish a solid plan based on your individual needs.