The 5 Main Steps in Estate Planning

An estate plan is critical in the management of your assets if something should happen to you. It ensures that when you pass, your loved ones will be taken care of and your assets will be distributed in an efficient and stress-free way.

Estate planning is an incredibly complex process that covers everything you own, so it’s important to make sure you find an experienced estate planning attorney who is familiar with cases similar to yours. Before you start the process of working with an experienced attorney, you will need to understand the main steps in estate planning so you know what to expect.

Here are the 5 main steps in estate planning:

1. Hire a qualified estate planning attorney.

The first step in beginning the estate planning process is identifying the right attorney. This process will be filled with immensely important decisions that involve not only you but your family as well. When seeking out an attorney, make sure you find one whose primary focus is estate planning. It’s also important to know whether or not they have handled cases like yours in the past. An experienced estate planning attorney will be able to analyze your case and walk you through the appropriate steps based on your unique situation.

2. Inventory both your assets and your debts.

Now that you have hired an attorney, the next step is to identify your net worth by creating a complete list of your assets and debts. Your assets will include things like insurance policies, investments, homes, vehicles, jewelry; anything and everything that you own. Once you’ve added the value of your assets together, you will need to subtract any debts you may have like credit card balances, student loans, and mortgages. After creating the inventory, make sure you store it in a safe and secure place.

3. Decide whether you need a living trust, a will, or both.

Living trusts and wills each have their unique benefits and drawbacks, so it’s important to be informed on both options. What works for one person will not necessarily work for the next, so don’t rely on the internet or your friends to help you make this decision. This is something you will want to discuss with your attorney so you can decide what makes the most sense for you and your family.

4. Account for the needs of your family.

One of the primary goals of any estate plan is to provide for your family when you’re no longer around. You will need to reevaluate your life insurance policy, name a guardian for your children, and document your specific wishes regarding the care of your children. Accounting for the needs of your family plays a key role in the estate planning process. An experienced attorney will be able to advise you on this step to ensure that all of your bases are covered.

5. Appoint fiduciaries to act on your behalf.

Before you can execute your estate plan, you will need to appoint someone who can act on your behalf if needed. This could include a legal guardian for your children, a power of attorney if you become incapacitated, and/or an executor of your will. You will need to discuss these appointments with your fiduciaries to make sure they understand and accept their roles. A fiduciary can be anyone you choose—a close friend, family member, or attorney.

As you can imagine based on these steps, estate planning is personal and different for everyone based on their finances and family situation. If you don’t do this yourself, it is all decided for you by generic state laws that don’t take into account your wishes. While the estate planning process can be complicated and confusing, it is worth it, and working with an experienced attorney will make the undertaking far less daunting. If you have any questions or are ready to get your affairs in order, contact us today to get in touch with an experienced estate planning attorney.