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9 Things You Should Know To Ensure A Successful Estate Plan

by Martha Simmonds
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Life’s only certain thing is that it will end any time soon. You spent your life earning and creating valuable assets and want to make sure they are transferred safely to the next generation. The best way to secure the transfer of your belongings to your loved ones is by creating an estate plan.

An estate plan contains everything from who will receive your assets after your death and how you want your assets to be managed if you cannot do it while you’re still alive. Simply put, estate planning safeguards your possessions both during your lifetime and after death.

Unlike popular belief, estate planning is for anyone with even a small amount of wealth and a family. The primary goal of estate planning is to guarantee that your money and assets are distributed correctly.

To create a successful estate plan, you need to understand and prevent the most typical mistakes and perform certain critical activities that are sometimes ignored. Let’s discuss the nine most important things you should know to ensure a successful estate plan:

1. Contact The Right Professional For Your Estate Plan

If you have a list of assets and possessions, the first step is to contact the right professional for the job. Financial advisors and estate planning attorneys from professional legal companies can help you devise an optimal estate plan. Online estate planning is one of the best options for smoothly drafting your estate plan for assets, investments, and possession. These professionals will ensure all your investments are updated automatically.

2. List Your Assets

No matter how few assets you think you have, you will find several valuable things when you begin making a list. These things can be passed along to your loved ones. But once you start looking out, you will find more assets than you expected. The assets that you can transfer to heirs are:

• Cash in bank, stocks, bonds, and jewelry
• Homes
• Lands
• Any investments in real estate
• Automobiles, boats, and other transportation machines
• Valuables in your possession like antiques, etc.

As soon as you have listed your possessions, you should estimate the value of your assets by calculating their values. Find out your home, land, and jewelry worth, and calculate the amount of cash you have in stocks, investments, or the bank.

3. Anticipate Potential Family Conflicts

Often, family disagreements simmer under the surface or are suppressed while the parents are still living. These disagreements might surface following the death of one or both parents. Too often, the specifics of an estate plan generate or intensify family tensions or resentments.

Some estate plan clients ignore potential conflicts and expect the heirs to figure it out themselves later. Other customers cause problems by making common blunders, such as having siblings with opposing personalities or beliefs inherit property or a business together.

The best thing to do is to avoid discussing family problems with your estate planner. Your estate plan might help your heirs stay together for years to come, or it can ruin family peace while you’re still alive.

4. Document A Will

Documenting your will is the simplest and most fundamental step in estate planning, yet it is frequently overlooked. Your documented will specifies how your assets will be distributed upon your death. It is important not to skimp on this phase and create your will with care.

To avoid difficulties, double-check that the text is spelled correctly. Your estate plan should explain what you intend to happen to your legal assets and things when you die. Its absence may result in the state interfering in these decisions. Make certain that your estate plan contains the following elements:

• Last will: This document allows you to name beneficiaries for your property and guardians for small children.

• Health Insurance Documents: Allows designated person access to healthcare information.

• Healthcare power of attorney: Name the person you wish to make health decisions on your behalf in case you are not in a physical or mental position to do so.

• Financial power of attorney: Determines who will make financial choices in your absence.

5. Review Your Retirement Funds

If you have designated beneficiaries in your retirement account, all accounts and insurance will be transferred directly to those individuals or entities following your death. Beneficiaries designated in the retirement account usually precede your will or trust. So naturally, it makes no difference how you direct the distribution of these accounts or insurance in your will or trust.

Contact your employer to review your retirement funds and list of beneficiaries. Examine each of these accounts to ensure that it has only those beneficiaries you desire. Reviewing your list of beneficiaries becomes vital if you’ve divorced and remarried.

6. Create A Trust

Trust is like a treasury that stores your money for your decedents. If you think your heirs are incapable of managing your assets, it’s always wise to set up a trust.

A trust protects your possessions while alive and after you die. A trustee can step in and manage your asset if you cannot handle your assets while you’re still alive. The trustee will also protect your assets from being misappropriated by your heirs. Trusts circumvent the probate procedure and provide tax advantages.

7. Discuss And Inform Your Heirs

If you want your estate plan to be successful, the most critical part is to inform your heir about it and discuss your options. However, this phase can make or ruin your estate strategy. No matter how difficult it may be to discuss your estate plan with your family, several issues might arise if you don’t. Most of all, your kids will not be prepared for the next events.

Additionally, it’s important to teach your heirs how to handle those assets. Getting a fortune in heredity may come as a surprise for your heirs, who may struggle to deal with it. Moreover, by educating them about investments, possible frauds, and how to handle the property, you can help them better manage your assets.

8. Plan Your Gifts

One of the most effective strategies in estate planning is gifting your assets to heirs while you’re alive. However, before making gifts, it’s essential to make a plan.

Instead of transferring your cash to your loved ones, gifting them property or land is a much better approach. While your next generation becomes acquainted with the assets, the effect of your contribution is also maximized through gifts.

9. Have A Business Succession Plan In Place

Most business owners lack a proper succession plan, one of the main reasons most second-generation businesses fail within a few years of succession. When a business owner leaves without a solid succession plan in place, the value of the company plummets dramatically.

A succession plan specifies the people who will operate and own the business. It also specifies exactly when the succession transition will take place. However, if the listed people are unwilling to take over the business, the succession plan hints at selling the business instead. A succession plan for a medium to large business succession plan usually takes five years or more.

Final Thoughts

Creating and implementing an estate plan may be a tedious yet important task for people who own assets and want to distribute them among their loved ones. To create a successful estate plan, it is wise to recognize common mistakes and follow the abovementioned points.

Most importantly, you must create your estate plan well in time, as death doesn’t wait for anyone. Update your estate plan from time to time according to any changes in the law and list of beneficiaries. Professional help is the best solution to all your estate planning issues.

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