A Guide to Estate Planning in 2023

Last Updated:
May 9, 2023
Kay Nicole

A Guide to Estate Planning

Estate planning, also called legacy planning, covers managing and distributing assets, investments, and liabilities after a person's demise. We know it isn't a pleasant topic. However, it is necessary, especially in 2023. With ongoing health alerts, economic and political crises, and uncertain times, planning your estate will give you some control and ensure your wishes are respected and carried out. It'll help you secure your family's future.

This guide will help you understand estate planning thoroughly. Whether you've just started on the road to estate planning or are looking into updating your previous plan, this guide is the one-stop solution to all your queries.

Estate Planning Procedure

Once you start estate planning, you must contact your lawyer to draft a will according to your wishes. The will is the official document to help the executor ensure that your assets and investments, including the process of conveyancing, are distributed amongst your family and friends according to your wishes. It also states how to settle your debt without any problems.

Your executor can be anyone from close friends and family to a third-party professional. It would be best to appoint a power of attorney with the authority to conduct affairs in your absence. Moreover, it would be in your interest to file an advance medical directive for your treatment if you can't communicate due to illness.

Benefits of Estate Planning

Here are some advantages of estate planning:

  • Eradicates Clashes

Estate distribution can cause a rift in many families. A good estate plan will help your loved ones to avoid arguments, legal battles, and disputes about the distribution of assets. You can hire estate planning services to help you draft a will, establish a trust and provide probate services.

  • Peace

You'll be at peace that all your assets, investments, and liabilities will be distributed as you wish.

  • Supporting Loved Ones

You can better support your loved ones financially.

  • More Than Just Financial Support

Remember, estate planning isn't just the division of your estate after your demise. It also involves your life insurance, medical care, memorial, and the care of your children. In short, it helps to secure yourself.

  • Tax Management

If you consult an estate planner, they'll help you distribute your estate in a manner that minimizes the tax obligations that your loved ones will have to deal with.

Estate Planning Checklist

Planning how your estate will be managed and distributed after your demise isn't everyone's cup of tea. However, it would be best to do it autonomously rather than letting the court decide who gets what. It would also save your loved ones from court proceedings and heartache.

Here is a rudimentary checklist that will help you get your estate in order:

1. Take Stock of Physical and Non-Physical Assets

Make a detailed list of all your assets. It includes your house, automobiles, bank accounts, business possessions, other properties, expensive artifacts, and investments. Listing your bonds, stocks, and FDs is also very important. Mention the names of the banks and account titles as well. You may also add minor items you own, like electronics, furniture, clothes, etc.

2. Mention Any and All Debt

Make a detailed list of personal and commercial debt obligations. It will help the executor resolve it with the estate income. Add mortgages, car loans or finance, credit card debt, personal loans, business loans, and any delayed payments.

3. Make A Cohesive Retirement Plan

Retirement is supposed to be the golden years of your life. Hence, finances should be the least of your worries. Make a retirement plan that includes insurance policies, annuities, IRAs, 401(k) accounts, and pensions to avoid financial discomfort during retirement. Be sure to see that proper beneficiaries are mentioned and that all payments are being made timely.

4. Choose An Executor

An executor is an administrator who ensures your wishes are fulfilled. This person can be a close friend or family member you trust entirely. It can also be a professional executor. Just ensure that whoever you choose for this role is responsible and has your best interests at heart. We recommend choosing a beneficiary from your will to avoid any conflict of interest among the stakeholders.

5. Draft A Will

It is the most crucial step of estate planning. Once you've listed everything you own and are liable for, the next step is to draft a will. You can do this online or with a lawyer's help. We recommend writing a living will too. This advance directive outlines how you'd like to be medically treated in case of an illness that leaves you incapacitated. However, it is best to discuss it with someone with the legal know-how of how things work.

6. Set Up A Trust

The best way to manage a large estate is to set up a trust. You can appoint a trustee to manage the trust even when alive. However, it would be best if someone is appointed after your demise.

7. Get Life Insurance

Get a life insurance policy immediately. Add critical genetic illness that runs in your family and disability coverage to the policy as well.

8. Appoint Power of Attorney

A power of attorney helps you give complete authority and power to another person if you cannot manage your affairs. It includes all medical, legal, and financial decisions.

9. Legally Binding Paperwork

After preparing all these documents, sit down with a lawyer and sign them in the presence of at least two witnesses. We also recommend notarizing your will so it can be carried out much more easily after your demise.

10. Keep Your Will Safely

After signing the will, keep a copy with you and another with your lawyer. Also, let a family member or friend know where you are keeping it so they know where to look.

11. Update Documents

Review your estate plan once every six to seven months and see if you need to add any additional documents. You may also make changes according to what you deem wise.

The Bottom Line

Creating an estate plan isn't easy. However, it helps ensure your loved ones will be cared for and your wishes will be honored. You should have a basic framework for managing and distributing your estate and add and remove documents and materials as time passes. Overall, an estate plan gives you peace of mind and is a sure-shot way of taking care of your family even after your demise.

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