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Preparing to create an estate plan

On Behalf of | Jun 12, 2023 | Estate Planning

Creating an estate plan may be something you have been thinking about for a while, but you may not know where to begin. The process of setting up an estate plan might seem so confusing or overwhelming that you keep putting it off until you are ready to tackle it.

You can make the process easier with some simple steps that can help you prepare to create your estate plan.

What an estate plan means

Before you begin these steps, it is important to know what having an estate plan means. Most people think it means having a will, and while a will is an estate planning document, so are various other documents.

In addition to a will, your estate plan could consist of a trust, power of attorney or another document that best fits your situation.

Identify your assets and debts

Next, make a list of everything you own. This includes major assets, such as houses or investment accounts, to minor items such as personal property.

When performing this step, you are likely to realize you own more than you think. Organize your list into categories and find the estimated value of each piece of property.

Do the same for any debts you have. After you pass away, your personal representative will be responsible for distributing your assets and paying your debts, so your will should contain a detailed listing of these items.

Examine your insurance policies

After you have made your list and determined what documents you need created, think about any insurance policies you have. Name or update any beneficiaries you want to receive the proceed of the policies.

Insurance policies typically do not get included in a will, so designating beneficiaries is the best way to make sure there is no confusion about what happens to them if you pass away.

Tax considerations

Finally, do not forget about taxes. Learn if your estate plan will subject you to any federal or state estate or inheritance taxes and take that into consideration when creating your estate plan.

Once you have completed these steps, it is time to visit a professional for any additional advice on your situation and to help draft and review your documents.