10 Estate Planning Tips to Prepare for Your Inevitable Demise

Planning for death can often be unsettling; however, when done well it can do so much to help your loved ones when they are grieving your death.

How Can I Best Prepare for My Death?

One day we will all meet our inevitable demise. Unfortunately, death will leave several important issues that need to be addressed. For example:

  • What happens to all of my property when I die?
  • Who will watch over my children if I die?
  • What happens if I become mentally incapacitated and am unable to make decisions?

Estate planning addresses these concerns and allows you to prepare for when you kick the bucket. Ultimately, if you properly plan your estate you can alleviate many future concerns and look after the best interests of your loved ones.

What is Estate Planning?

Estate planning is the process of arranging and deciding how your property will be managed and distributed after you’re pushing up daisies. An estate is simply all of your property.

An estate includes all of your tangible property, financial assets, and personal belongings. Financial assets include real estate, money, stocks and bonds, mutual funds, etc. Ultimately, the main goals of estate planning are to reduce uncertainty for your family after you’ve passed the pearly gates.

Isn’t Estate Planning Only for the Wealthy?

There seems to be a common misconception that estate planning is only for the financial elite. However, this could not be further from the truth. Estate planning isn’t just for the wealthy–everyone dies.

Anyone can plan their estate no matter their economic status. Moreover, everyone should plan their estate before it’s too late.

10 Estate Planning Tips To Prepare for Your Inevitable Demise

Unfortunately, if you do not plan your estate then the decisions about your health and property distribution are made by someone else. Worst of all, if you don’t plan your estate before your death then the state will determine how your property will be distributed.

In some instances, if you don’t plan your estate and you have no blood relatives or family members, your property could pass to the state of Virginia. Furthermore, to help you plan for when you’re six feet under, here are 10 estate planning tips you need to know.

(1) Estate Planning Tips: Create a Will

The first estate planning tip is to create a will. No matter what your economic status, everyone in the United States should have a will. A will is a binding legal document that allows you to make important decisions that become effective when you’ve passed away.

Creating a will is the cheapest and easiest way to take care of your affairs after your death. Wills are extremely flexible. There are numerous things that can be addressed by creating a will.

For instance, you can name a guardian for your minor children. Additionally, you can determine who will inherit your property.

However, without a will, distribution of your estate becomes problematic. If you die without creating a will the state will make the decision of what relatives receive your property. [1]

Then if you have no relatives to inherit your property, your property would pass to the state of Virginia. [2]

Hence, the most important of all estate planning tips is to create a will.

(2) Estate Planning Tips: Name a Trusted Guardian for Your Children

If you have no minor children then you can proceed to point number three. When creating your will, you have the ability to choose a legal guardian for your minor children in the event of your death.

One of the most important estate planning tips is to make sure you name a guardian for your children that you can trust on the event of your death. This can be a family member or a close friend.

Above all, it is important to pick someone that you can both trust and would be financially able to take care of your children. Therefore, you should pick someone able to provide your children with a home and the necessary care they need.

(3) Estate Planning Tips: Name a Trusted Executor

When creating your will, you need to name an executor to administer your will. The executor of your estate is the individual sworn to carry out the wishes expressed in your will. [3]

The executor is charged with collecting, managing, and distributing your assets at your death. Under court supervision, the executor represents your estate in any litigation.

If you don’t name an executor, then the court will appoint an administrator.

Above all, the duty of the executor is to oversee the distribution of your property. [4]

The executor is required to take an oath. This oath ensures that the executor will to the best of his or her abilities make sure the wishes in your will are faithfully performed. [5]

Therefore, it is important to name a qualified executor to manage your estate.

 (4) Estate Planning Tips: Taking Care of Debts

The fourth estate planning tip is to decide how to handle your debts. A debt is simply if someone owes you money. A will provides you the ability to decide how to handle any debts that are owed to you.

When creating a will, you can cancel all debts owed to you at the time of your death. This would relieve those individuals from the debt burden. Additionally, you have the option to transfer those debts to someone else.

In contrast if you owe any large debts to anyone, you can state in your will how you want to handle this outstanding debt. Usually, the debt would just be taken from the estate. Thus, it is important to decide how you want to handle your debts when estate planning.

(5) Estate Planning Tips: Carefully Determine How Your Assets Should be Distributed

The primary purpose of creating a will is to determine how you want to distribute your property upon your death. A will provides you the flexibility to distribute your property as you wish upon the occurrence of their death.

This means that you get to decide what relatives and friends receive your property. If you are not comprehensive, you could cause the risk of creating arguments between loved ones in probate court.

Thus, it is important to be comprehensive when determining what property should go to each relative.

(6) Estate Planning Tips: Prepare for Probate

Probate is the judicial process for determining the validity of a will and administering your assets.

First, your executor will file a petition to establish the wills validity. [6]

Then there is a brief hearing to determine the validity of the will.

Finally, the court will affirm the will.

One option to prepare for probate is to establish a trust for your loved ones. A major benefit of a trust is that it may allow your loved one to avoid probate all together. Therefore, it is important to prepare your loved ones for this process.

(7) Estate Planning Tips: Create a Trust

Trusts are a fiduciary relationship where one or more people manage property on the behalf of others. [7] The person managing the trust is called the trustee and the person receiving the income from the trust is called the beneficiary. [8]

A trust usually consists of income producing property or assets. Income producing property includes land, stocks and bonds, and mutual funds. The person managing the trust has the duty to manage the property in a way that is beneficial to the beneficiary.

To put simply this means that the trustee is obligated to ensure that the trust is producing money. Above all, the trustee must look out for the best interests of the beneficiary. One of the main benefits of trusts is that they allow you to avoid the probate process.

Upon your loved one’s death the trust would transfer to the beneficiary. Ultimately, if your loved one does have income producing property, then it may be beneficial to create a trust for them.

Therefore, if you have income producing assets establishing a trust can have numerous financial and tax benefits for your loved ones.

(8) Estate Planning Tips: Ensure Your Family Knows Where to Find Important Documents

It may be helpful to prepare a list for your loved ones that provides the location of important documents. This can include birth certificates, marriage certificates, financial statements, bank account numbers, etc.

Unfortunately, your loved ones will likely have many things to attend to in the event of your demise. Therefore, creating a comprehensive list of important documents and their locations can be extremely helpful to your loved ones.

(9) Estate Planning Tips: Determine Power of Attorney

Power of attorney is the authority to make important decisions for you in the event you become mentally incapacitated.

Mental incapacity occurs when your mental health diminishes to the point where you effectively lose the ability to make important decisions. Moreover, if you become mentally incapacitated you will be more vulnerable to financial exploitation and elder abuse.

Fortunately, you can prepare for mental incapacity by determining power of attorney. Power of attorney is a written document that legally authorizes an individual to act on your behalf.

Once the document is signed, power of attorney can become effective immediately, on a certain date, or upon an occurrence of a particular event. [9]

If by some unfortunate event you do become mentally incapacitated, power of attorney allows a trusted legal guardian to step in and handle your financial, medical, and personal affairs.

Furthermore, power of attorney does not necessarily last forever. [10]

If your mental health improves, then power of attorney could terminate.

Additionally, power of attorney ends if you die or if it is revoked. [11]

Therefore, granting someone you trust power of attorney now may protect you medically and financially in the future.

(10) Estate Planning Tips: Review your Estate Planning Documents every few Years

The key to effective estate planning is being active and prepared. One of the simplest ways for you to do this is to review your estate planning documents every two to three years. Reviewing your documents every few years is crucial to effective estate planning.

Unfortunately, situations change and people don’t stay close forever. You want to make sure the right people inherit your property. In the end, you want to ensure your loved ones are properly taken care of after you give up the ghost.

Ultimately, the best way to make sure this happens is to keep your estate planning documents up to date by reviewing them every few years.

Conclusion

Thinking about your death can be upsetting and unsettling. However, you are doing yourself and your loved ones a disservice if you do not plan for your eventual death.

If you do not properly plan your estate, your loved ones will likely have to undergo a lengthy and expensive probate process. One of the best ways to look after the long term interests of yourself and your loved ones is through active estate planning.

Hiring an experienced estate planning attorney can help.


[1] Va. Code § 64.2-200

[2] Id.

[3] Va. Code § 64.2-501

[4] Id.

[5] Id.

[6] Va. Code § 64.2-448

[7] Va. Code § 64.2-700

[8] Id.

[9] Va. Code § 64.2-1607

[10] Va. Code § 64.2-1608

[11] Id.

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