Many people may realize they need an estate plan but not know where to start. There are a few things people should keep in mind as they create their estate plan.
According to Nerd Wallet, one of the first steps of estate planning is listing all the assets. People should create a list of all their financial assets, such as their life insurance policies, investments and retirement plans. They should also include their bank accounts. Additionally, people need to take an inventory of their tangible assets. These include personal property, vehicles and real estate. Once people understand the value of their estate, they can move on to other steps.
Know the goals behind an estate plan
As people put together this plan, they should ask themselves several important questions:
- What kind of healthcare will adults need in the future?
- What will happen if people cannot manage their own affairs?
- How will parents provide for their minor children?
- Who will take care of the children?
By asking themselves these questions, people can begin to understand what they will need to include in their estate plan. Adults may need to create a medical care directive in case they cannot make their own medical decisions. People may also need to name someone as the power of attorney so this person can manage their finances if they cannot do so. Additionally, parents may need to name a guardian for their children and leave instructions about the care they want the children to receive.
Plan to give back
Many people may want to give a portion of their estate to charity. The Motley Fool says that people should leave instructions about charitable contributions. People should make sure they list the charities they want to support and include how much money will go to each charity. These precise instructions can help remove conflict and ensure that each charity gets the amount of money people intend to donate.