Planning your estate in the case of your own death or injury is uncomfortable at best, but must be done in order to protest your assets and ease the process for your beneficiaries and family. We have five must-do tips to get your estate in order now, three of which we will cover this week.
1. Name Your Beneficiary
Firstly, if you have filled out beneficiary designation forms for financial accounts, you are already on your way to an estate plan. Be sure these are as up-to-date as possible (including marriages and divorces, of course), to avoid benefits going to the wrong person. It is important that these documents are in accord with your will, as financial designations come before estate planning documents.
2. Name Legal Guardians
Regardless of asset level, designating legal guardians for your children is an absolute must-do. It may be difficult for spouses to agree on guardianship, but in the case that the unthinkable happens, it is far better to have these things decided ahead of time. By focusing on the parental qualities of potential guardians, couples can come to a decision rather quickly, as well as consulting the potential guardians in regards to their willingness to take over. Their financial situation may be another factor taken into consideration, both in respect to choosing a guardian and in dividing your assets and estate.
3. Write your Will
Again, this subject matter makes people very uncomfortable and uneasy, but it is best in the long run to get it out of the way. Decide with family and an attorney what steps should be taken in the event of terminal illness or the inability to express your wishes. Much of this will refer to life-support equipment, decisions better made in cold blood than the emotion of the moment.
These three points will enable you and your family to plan ahead for difficult times and decisions in a way which fosters discussion and allows for various points of view, rather than having it all fall to one person in the case of a sudden event.
Next week we will discuss the two other steps.
Source: Morningstar, "5 Estate-Planning Tasks That You Shouldn't Put Off," Christine Benz, Aug. 20, 2012