As you make progress and go through life’s different milestones, it is important that you plan for what is to come. Some of these milestones are planned for, and these could include graduations, setting up a business, birthing children, and retirement. But others may come unexpectedly. Planning for the expected and unexpected allows you to prepare for what lies ahead.
You have probably heard that you need to draft an estate plan. Many think that estate planning is exclusive to the wealthy, but it makes sense that everyone, regardless of their financial status, expresses their wishes in a will. But how do you create an estate plan? What does the estate planning process entail?
Draft an Inventory of Your Assets and Debts
What are your assets? Are there any debts? What are your goals and priorities?
Create a list of the things you own and what you owe, including important account details and contact information. Perhaps you would like to fund a charity project for a cause you care about, or maybe you want to secure the higher education of your generation unborn. It is important that you pen down these details, so you get the proper documents drafted to accomplish your goals.
Ensure this list, as well as original copies of relevant documents, are stored in a secure and easily accessible location. Whether this list is simply a piece of paper or a digital file, its security is important as you’d have to provide a copy for the executor of your will.
Develop and Coordinate a Contingency Plan
Once you have determined which areas require attention in order of priority, it is now time to craft a documented plan so that members of your family can still carry out your wishes even if you become incapacitated, without having to go through a drawn-out court process. This documented plan should include a strategy that ensures income flow if you were to suffer some disability or require caregiving at some point in your life. Income, in this case, refers to money set aside to cover potential expenses when these unforeseen events occur.
Create a Durable Power of Attorney
A durable power of attorney is simply a legal document that grants a trusted person authority to act on your behalf. This person – known as agent or attorney-in-fact – is responsible for managing your finances in the event that you are either mentally or physically unable to make decisions yourself.
Protect Your Children’s Property
The main goal of setting up an estate plan is to protect your loved ones and provide for their future needs. As much as your estate plan should include provisions for your heirs, you must name a guardian for your children if they are under 18. If any of your children or beneficiaries have special needs, it is important that you carefully craft your plan for them so you do not compromise their eligibility for government benefits.
Protect Your Assets
A key part of an estate plan includes protecting your assets for your beneficiaries and taking care of other needs such as charitable wishes and estate taxes while meeting your objectives. Your estate plan may also include specific asset distribution strategies – exactly how you may want unique assets like real estate, stock, or family-owned business to be transferred. Many people protect their assets by using permanent life insurance and trusts, while ensuring there is a plan to meet future goals.
Document Your Wishes
Your estate plan must be legally documented if you want your assets to be distributed in a way that satisfies your wishes and goals – whether you die or become incapacitated. This means designating beneficiaries for assets such as your retirement accounts and life insurance policies. It also means that you properly name titles of material assets like properties and automobiles.
It is important that you work with an attorney at this time so you can be sure you have a will that reflects your wishes at different moments of your life, and even after you pass away.
Name Fiduciaries
A fiduciary is a person empowered by you to act on your behalf in the management of your assets. This role requires someone you trust and are confident in, as the person may become an executor of your will, guardian for your heirs, or power of attorney if you are unable to make decisions for yourself.
Whoever you name as fiduciaries must be informed of their role and agree to the appointments. They must also know where you stored your original estate planning documents. A fiduciary can be a family member, friend, or a hired professional.
Final Thoughts
Whether you have accumulated wealth over your lifetime or you have barely started, an updated estate plan protects you and your loved ones against the impact of unexpected events. It not only helps in the management of your assets but ensures your wishes are followed to the letter.
About the Author: Roxane Kaye, has been practicing law since 2002. She is admitted to practice law in Michigan state courts and before the Federal Bankruptcy Court of Eastern Michigan, Southern Division, as well as the Federal District Court of the Eastern District of Michigan. Roxane covers cities such as Burton, MI, Flint, MI, Fenton, MI, Beecher, MI, Lapeer, MI, Waterford, MI, Auburn Hills, MI, Pontiac, MI, Howell, MI, Owosso, MI, Wixom, MI, Rochester, MI, Rochester Hills, MI, Novi, MI, and South Lyon, MI.
You may contact Roxane below:
Roxane M. Kaye Kaye Law Office, PLLC
8161 S Saginaw St
Grand Blanc, MI 48439
