With the current health crisis looming over everyone’s mind, you must have at least thought about how to ensure your family is well-provided for in case the worst happens. Unfortunately, according to a survey of middle-aged and older Americans, people are preparing their estates less with each year.
In a survey of thousands of older Americans in 2017, only 42 percent of the respondents said they’ve prepared a will. The number dropped by a shocking 10 percent in 2020, with only 32 percent of respondents saying they have a will.
Passing away when you’re intestate can have some serious impacts on your family’s future. With the help of an estate planning lawyer, you can avert fiscal loss and familial strife. But you need to be knowledgeable about this process yourself. Use this quick reference guide to ensure are ready should anything unfortunate happen.
1. Take Inventory of Assets
Even if you think you don’t have enough things to justify a will, you may be surprised of what you’ll find when you make a comprehensive inventory of your assets. These assets fall into two categories, tangible and intangible.
Tangible assets include things that can be manipulated physically. The most important tangible assets are your house and any other real estate holdings. Cars and other vehicles, such as boats, come up next. Objects that are valuable, whether because they’re precious or personally significant, also fall into this category.
Intangible assets are things that exist only on paper. These include your insurance policies, any retirement plan accounts, the deed of ownership to a company, or stocks.
2. Account Debts and Obligations
Once you are aware of all your assets, it’s equally important to ensure you know all your debts and similar financial obligations. If you don’t have an idea of the extent of your debts, you’ll have a hard time including reasonable provisions for them in your will.
These include mortgages, loans on your home or car, student loans, and personal debts with people you know. Allocating enough of your assets to fulfill these debts and obligations is essential in making sure your family won’t be stuck with them.
3. Plan for Your Family’s Care
Speaking of your family, once you have all your assets and debts neatly compiled, you can now account for how they’re going to be taken care. Calculate their expenditures and see if your assets can cover for them for a reasonable amount of time. This is particularly important if you’re the sole breadwinner.
You should also focus on the well-being of your children when you pass away. Who will be their guardian? Who can act as a backup should your first choice of guardians be unavailable? These are questions you need to decide upon at this stage.
4. Confirm Directives
Finally, your will and estate plan need legal directives. The primary directives usually include the following:
- Medical care directives account for your medical care should you become incapacitated for some reason and unable to make your own healthcare decisions.
- Power of attorney entrusts someone with control of managing your finances, signing documents in your name, and other associated powers, should you become unable to do so on your own.
- Establishing a trust lets you put assets in store for your chosen beneficiaries and bypass probate court when you pass away.
Once you have all your directives in order, it’s time to ask a legal professional to draft your will and notarize them for you. Make sure there are enough copies of your will and relevant documents to ensure your wishes won’t be overlooked should the worse come to pass.