Estate planning is an important part of personal financial planning. The process allows you to express your wishes regarding how your legal and financial affairs should be handled in the event of your incapacitation or death. This helps to take care of you and protect your loved ones. However, to avoid undesired results, estate planning has to be carried out properly. An estate planning checklist will help to make the process easier and ensure you leave nothing to chance.
Here is what you need to know.
Important Documents You Need to Consider
There are certain essential estate planning documents you need to help you get your affairs in order. Completing these documents will go a long way in ensuring your wishes are followed after your death or when you become incapacitated. Below is an estate planning checklist to guide you.
Last Will and Testament
A will is a legal instrument that spells out what will happen to your real estate, personal belongings and financial assets when you die. This document dictates who the beneficiaries of your estate will be and what they will inherit. You can also appoint an executor for your estate and a guardian for your minor children. Without a will, your assets will be distributed to heirs in probate according to Texas intestate laws.
This estate planning tool is created and legally exists during your lifetime. A trust is a fiduciary relationship that allows you to transfer legal ownership of your assets to the trust. You also name a trustee to manage the trust and ensure the instructions in the trust document are fulfilled. Establishing a living trust helps to ensure the seamless transfer of your property to beneficiaries without probate.
Durable Power of Attorney
This legal document allows you to appoint an agent and give them the authority to handle financial and legal affairs on your behalf. The power of attorney comes into effect when you sign the document and the agent will have authority if you become physically or mentally incapacitated. If you do not have a durable power of attorney and become incapacitated at some point, a court may appoint a guardian.
Medical Power of Attorney
Also known as a healthcare power of attorney, this document gives a designated person the legal authority to make medical decisions for you when you are incapable of doing so. This can happen if you are too ill, unconscious, or mentally incapacitated. Some of the decisions your agent will make relate to issues like daily routine, medical care, and end-of-life care.
A living will is also called an advance healthcare directive or a directive to physicians. This legally binding document contains instructions to your physicians regarding the life-sustaining treatments you prefer in case you suffer from a terminal illness, irreversible condition, or are permanently unconscious and can no longer communicate. This makes for a great way to express your healthcare wishes and ensure they are honored even if you become incapacitated.
Steps to Take in Order to Have a Solid Estate Plan
A comprehensive estate planning checklist should include more than just the different kinds of documents you should have. It is also important to learn the steps to creating a well-rounded estate plan. Here are some tips to help you get started.
1. Hire a Qualified Estate Planning Attorney
Estate planning can be complicated. To ensure a smooth process, find and work with an experienced estate planning lawyer. This expert will provide advice and guidance to help you avoid common pitfalls.
2. Assess Your Assets
To get a clear picture of your financial situation, be sure to calculate your net worth. This will require you to inventory your assets and debts so you can know what you are working with and plan accordingly.
3. Consider Your Family’s Needs
A good estate plan will focus on protecting your assets and your loved ones. Depending on your family situation, make sure you have enough life insurance, choose a guardian for your minor children, and make your wishes known regarding the care of your children.
4. Decide Between a Will and a Revocable Living Trust
Both a will and a living trust are essential estate planning documents. It is important to understand the differences between the two as well as their pros and cons. This will enable you to make an informed decision. A Texas estate planning attorney can help you determine which one will work best for your family, if not both.
5. Establish Your Directives
The next step is to plan for your mental incapacity. Make sure your estate plan includes a living will and a durable power of attorney. This allows you to state how you would like various aspects of your estate to be handled when you can no longer make decisions yourself.
6. Plan For What Happens After You Die
Appoint beneficiaries for your financial and life insurance accounts. Also, plan for your funeral and choose the person who will carry out your instructions and wishes.
7. Execute All Documents
Be sure to sign all your estate planning documents, organize them, and store them in a safe place. Lastly, update your estate plan every few years as your life changes.
How a Texas Estate Planning Lawyer Can Help
Texas estate planning laws are complex. As such, be sure to work with a knowledgeable Texas estate planning attorney. This professional will provide expert legal advice, assist in creating binding legal documents, and help you build the strongest estate plan. Learn more with a free consultation.