Have you put off creating your estate plan because you don’t know where to start? Or maybe because you aren’t sure what components you should include in your plan? If either, or both, of those apply to you, you are not alone. Surveys tell us that over half of all Americans have yet to create an estate plan, despite understanding the importance of having one in place. Like you, most of those people admit that not knowing where to start and/or what to include in the plan is the reason for their procrastination. Working one on one with an experienced estate planning attorney is the best way to ensure a well thought out and comprehensive estate plan. To get you motivated though, the Vernon Hills estate planning lawyers at Hedeker Law, Ltd. explain “10 Steps to Creating an Estate Plan.”
Although not all steps will apply to everyone, most of the following 10 steps will help the average person to create a successful estate plan and take some of the intimidation factor out of the concept of estate planning.
- Define your goals. Estate planning should encompass much more than just deciding how your assets will be distributed after your death. A comprehensive plan will accomplish additional, related goals as well such as incapacity planning, probate avoidance, and Medicaid planning.
- Make a list of assets. You probably have a fairly accurate idea of your net worth; however, when creating an estate plan you need a detailed list of assets. Include as much detail as possible, including the current value, location or account number, and whether the asset is encumbered. If you have heirlooms or sentimental assets, make sure you also include those even if they have little, or no, monetary value.
- Make a list of beneficiaries. Family members and loved ones are obvious beneficiaries. You may also want to include distant relatives, such as a favorite nephew, long-time friends, charities, or even your pet.
- Choose fiduciaries. Throughout your estate plan you will have several opportunities to appoint people to fiduciary roles, including Executor, Trustee, and Guardian. Find out what the role entails and choose wisely.
- Calculate how much you need to leave behind. This is particularly important when you are young and have yet to accumulate valuable assets. Knowing what your family needs if you are gone tomorrow is critical because you may need to supplement your assets with lie insurance until you build your estate.
- Protect your child’s inheritance. This step also applies if you are still relatively young. A minor child cannot inherit directly from your estate. Planning accordingly in your estate plan is critical. Usually, this means establishing a trust to protect the inheritance you leave behind until your child reaches adulthood.
- Make changes to titles and/or accounts. The manner in which title to property is held, or the type of account designation, often determines if an asset is a probate asset or not.
- Think ahead – long-term care planning and advance directives. You may think you are too young to worry about incapacity and/or long-term care, but you are not. It is never too early to start thinking ahead. Especially considering that the average person cannot afford the cost of LTC. Furthermore, executing advanced directives ensures that your wishes with regard to end life medical treatment are honored and that the person you choose makes treatment decisions for you if you cannot make them.
- Write a Letter of Instruction. Most people include something in their estate plan that is controversial or that loved ones will not understand. A Letter of Instructions allows you to explain anything left out of your official estate plan or that was otherwise not well-explained. Although the terms of a Letter of Instruction are not legally binding, they can go a long way toward proving your intentions if need be.
- Safeguard your plan. One your estate plan is in place, make sure all the documents are safeguarded. You should keep an original in a fireproof safe in your home and your estate planning attorney should have a set.
Contact Vernon Hills Estate Planning Lawyers
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding how to get started on your estate plan, contact the experienced Vernon Hills estate planning lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.