5 Ways to Prepare for Estate Planning

Estate planning is the process in which an individual or family establishes a transfer of assets in preparation for death. As we discuss in a previous blog post, there are 4 key aspects involved with estate planning:

  1. Will
  2. Living Trust
  3. Power of Attorney
  4. Advanced Healthcare Directive

Establishing a legal estate plan can be a very stressful and time consuming process, regardless of the size or wealth of your estate. After all, the ultimate goal of estate planning is to protect you, your assets and the property you’ve worked hard to earn over the years.

At Mlnarik Law Group, our estate planning attorneys will be able to alleviate much of the strain of the process. However, there are also 5 steps you can take to speed up the process and reduce your anxiety.

#1 – Keep an Inventory of Your Assets

How do you keep track of your assets? Do you own a filing cabinet or folder of your important documents? Can you trust a court to be able to find and organize all of your assets in the event of your death? If you live in a home, drive a car, have a job, or put your money into a bank account, it’s very likely that you also have assets.

Assets to include in your inventory may include your:

  • Home/s, land or other real estate
  • Vehicles, boats or trailers
  • Collectible goods
  • Checking or savings accounts
  • Stocks, bonds and mutual funds
  • Life insurance policies
  • Home appraisals

When you eventually meet with an estate planning attorney, you can pass along your inventory of assets. This will also speed up the time it takes your attorney to value your assets.

#2 – Account for Your Family’s Needs & Wants

Once you’ve completed your inventory of assets, the next steps is to determine how to protect your assets and family upon your death. At this point, you should sit down with your immediate living family (e.g. parents, children, siblings, grandparents) and listen to what they think they need when you’re gone. In the end, how your family and assets is up to you, but it’s important to know where your family stands with everything right now.

Some important aspects to understand from your family include:

  • Would getting life insurance be beneficial for my family? If you’re married and your lifestyle requires dual incomes, then getting life insurance would help your partner take care of your family after you’re gone.
  • Name a primary and secondary guardian for your children. Establishing 1–2 guardians in your Will can help avoid family court battles which would drain your estate’s financial assets.
  • Document your childcare wishes. Can you confidently say if any of your family members would do as good as a job as you to care for your children? This is the moment to document in detail what you want for your children’s care. Otherwise, that care will be decided by either a judge or whomever gets custody of your child upon your death.

#3 – Establish Your Legal Directives

Your complete estate plan will comprise several important legal directives that you’ll have to determine before you die. These directives include:

  • Trust: with a living trust you can designate parts of your estate to go toward certain things while our alive. If you become incapacitated, you can select a trustee to take over your estate. Upon your death, your trust assets will transfer to your designated beneficiaries and avoid court probate to distribute your property.
  • Medical Care Directive: this presents your wishes for medical care if you become unable to make those decisions yourself.
  • Financial Power of Attorney: this allows someone to manage your financial or legal affairs if you’re medically unable to do so.
  • Limited Power of Attorney: this imposes limits on the powers of your named representative, in case the idea of turning over everything to another person concerns you.

#4 – Review Your Beneficiaries

Make sure you have beneficiaries established for everything in your inventory. When filling out who you designate as beneficiaries, any blank sections will be sent to probate for the courts to decide who gets what.

#5 – Take Note of Your State’s Estate Tax Laws

How your state determines estate taxes might be different than those at the federal level, which often only applies to very large estates. In addition, some states have estate taxes and inheritance taxes that would apply to your assets upon your death. Contact Mlnarik Law Group to learn about estate tax laws in California.

Contact Mlnarik Law Group!

If you’d like professional assistance with planning your estate in any way, contact Mlnarik Law Group by phone at (408) 919-0088 or by email. Learn about how our process works on our Estate Planning Services page.