The pandemic has a lot of Americans thinking long-term about their health and the possibility of no longer being with loved ones. As a result, there’s been a renewed interest in wills and estate planning.

If you haven’t set up a will or an estate plan yet, you’re not alone, over 40% of Baby Boomers haven’t addressed this issue either. For some reason, wills and estate planning seem like an expensive and overwhelming task. However, it doesn’t have to be. 

Here are 7 tips to help you properly plan your estate distribution and avoid probate:

1.) List and Distribution of Assets

When thinking about making an estate plan, start by writing down your assets, including real estate, personal property, financial accounts, and investments. Personal property includes motor vehicles, boats, jewelry, and any other property of value. 

Your investments include stocks, bonds, retirement accounts, life insurance policies, and others. Be sure to include account numbers and when you first acquired each of them. The more you prepare ahead of time, the easier it will be to create the necessary documents. It also helps to include all debts and liabilities so these payments can be taken care of after your death.  

BSE has an estate planning worksheet that can be provided for this purpose.

2.) Beneficiaries

Most people use their estate plan to direct who will receive their property when they die. You can use a will or a living trust to name beneficiaries for your property (as well as non-probate transfers, in some situations). Many people choose a will when naming their beneficiaries because of its simplicity. The use of a living trust as an alternative will avoid probate and provide the opportunity for additional levels of planning.

If you don’t use your estate plan to determine who will receive your property after death, assets you own in your name may be distributed through your state’s intestate succession laws.  This result can be surprising to survivors, especially in the case of second marriages. 

3.) Powers of Attorney

A power of attorney (POA) is a legal document that allows someone else to act on your behalf when you cannot. They are especially important for older people and others who wish to choose a trusted person to act on their behalf.

Financial power of attorney

A financial power of attorney appoints a person to be your representative regarding your financial affairs during your lifetime (for younger persons, this is generally created such that there is no power given until such time as you are unable to act on your own behalf). You want to choose someone who will act in your best interest. At the time you execute a Durable (Financial) Power of Attorney, you will determine how much control they’ll have over your estate and finances.

Medical power of attorney, including a health care directive

A medical power of attorney is someone designated to make medical decisions for you. This person’s duties come into effect when the individual is incapacitated and unable to make decisions. The health care directive allows a person to provide the world with evidence of your wishes in an extraordinary circumstance.

4.) Wills and Trusts

Wills are a common estate planning tool because they tend to be less expensive, simpler, and more well-known. In a will, you state who you want to inherit your property and may name a guardian to care for your young children should something happen to you and the other parent.

If you don’t make a will before your death, state law will determine who gets your property and a judge will decide who will raise your children without your input (and either or both may not be whom you would have chosen). If you leave anything more than a small amount of property through a will, probate court proceedings will probably be necessary after your death.

If you hold your property in a living trust, your survivors won’t have to go through probate court, a time-consuming and expensive process.

5.) Provide care for your young children – Guardianship

As mentioned above, you can use your estate plan to name a guardian to care for your young children if both you and your children’s other parent aren’t available. You can also name a property manager or conservator to look after your children’s property.

6.) Storing your documents

Itemize all your assets, including numbers and locations. Print a copy of your list and keep it with your will, insurance policies, healthcare directives, and other important documents for quick reference.

7.) Get started

Taking these important steps will leave you better prepared than most Americans. Just over half of those over age 55 have a will or other form of distribution document in place. Even fewer have prepared an advance healthcare directive or arranged for power of attorney.

If you have prepared your will or estate, remember it needs to be reviewed from time to time. A change in marital status, a new baby or children getting older, appointees getting older are just some of the events that would trigger changes to your plan.

Contact Brydon, Swearengen & England for your estate planning needs. Our attorneys will educate you on the process and help you put together a solid plan.