Though having a valid and proper will is obviously an important step all adults should take, more can still be done to ensure loved ones are taken care once we’re gone. In particular, the use of an estate plan address numerous critical areas of concern, including what happens following a person’s passing, the reasons behind why these steps were taken, and designating the proper person or parties to ensure these wishes are brought to fruition.
The majority of wills engage with the first area as to what takes place after the testator dies. As well, legal documents, such as trusts and powers of attorney, further delve into such subject matter. However, these types of documents often fail to elaborate upon the motivations behind the testator’s asset distribution to selected beneficiaries. By opting for an estate plan then, the testator can help clarify any potential misunderstandings down the road because he or she will be providing clarification to their estate distributions.
In order to implement an effective estate plan, some preliminary steps are recommended to see to the plan’s success in the future. First, creating a complete and accurate list of all assets and debts is recommended. Be sure to include any and all information that will help to identify the approximate value to each asset, along with the associated present owner(s) and any beneficiaries. Next, write a letter which explains both your reasons and intentions behind your desired estate distributions with as much detail as needed. Doing so can go a long way toward cutting off any family disputes before they can actually begin.
Moving forward, choose the parties you want to see carry out your estate plan. These roles can include the executor, trustee, and guardian. The executor serves as the testator’s personal representative. He or she usually has to make critical decisions while also adhering to estate deadlines; a role that many spouses may find difficult following their loved one’s passing. A trustee is employed whenever an estate plan includes a trust. Occasionally, this role is fulfilled by a bank or corporation rather than a family member because of their ability to remain neutral while effectively managing an estate’s assets. Last, the guardian assumes legal responsibility for any minor children. Because of the major implications behind such a position, a great deal of consideration should go into designating the individual who could potentially assume this role.
Finally, once the previous steps have been undertaken, be sure to update your estate plan on a regular basis. In doing so, keep all interested parties apprised as to any changes made to the estate plan. Failing to update critical information can often upend an otherwise well-crafted estate plan, potentially leaving family members and loved ones on unsure footing for the future.