"Estate planning" may sound like an intimidating term, but all it means is that you're taking action to make sure your affairs are in order in the event of your death and/or incapacitation.
It doesn't have to be complicated. The following is a list of simple estate planning tips—some dos and don'ts to follow as you proceed.
1. Do your research
With so many resources available online, it's easy to get started with estate planning from the comfort of your own home. Reputable sources such as LegalZoom can help you learn about the basics of estate planning and get you thinking about which types of estate planning documents you might need.
Most people know that a last will and testament is one of the most important estate planning documents you can have, but there are also several other options you might consider, including a living will to specify the medical care you would want to receive in the event you cannot communicate your wishes yourself.
A living trust, which places your assets into a trust for your use during your lifetime, to be transferred to your chosen beneficiaries at your death, may also be something you want to think about.
2. Do seek estate planning advice
Even if you think you have a relatively simple estate, it's a good idea to speak with a professional to make sure you've got everything — and everyone — covered.
This is especially important if you choose to move forward with slightly more complex estate planning tools. For example, with a revocable living trust, you will need to be sure the trust is funded (your assets are transferred into the trust) and that you have a pour-over will to cover anything inadvertently left out.
Please note that it is crucial that you get advice from an attorney who is familiar with the laws of your state.
3. Do consider who you want in charge of your affairs
Whether it's your executor (who will be distributing your estate according to your will) or your durable power of attorney (to whom you give decision-making authority on your behalf), you need to be certain you choose people you can trust and who are capable of doing the job.
A related "do": Do talk to the people you choose to be sure they are willing to serve in the capacities you desire.
4. Do create a last will
If you only make one estate planning document, a last will is the way to go. Through a last will, you can designate where you want all of your personal and real property to go after your death and you can also name a guardian for minor children.
If you die without a will, you are considered "intestate," and everything you own is distributed according to your state's intestacy laws. Under these rules, things may not end up where you would have liked. Also, a court may have to appoint a guardian for your children.
5. Do plan for emergency and end-of-life care
A living will, advance directive, or health care directive is also high on the list of “must-have" estate planning documents. A living will provides instructions regarding the medical care you do or do not want to receive.
It goes into effect if you are unable to communicate your wishes yourself and covers a variety of issues, including the use of breathing and feeding tubes.
In the same vein, a durable power of attorney is something to consider. Through a DPOA, you give someone the authority to make decisions and take actions on your behalf should you become incapacitated and unable to make decisions for yourself.
6. Don't forget about pets
Most pet caretakers think of their furry and feathered friends as part of the family, so it's only natural to include them in the planning of your estate as well.
According to the law, pets are personal property, so you should designate someone to take care of your pet once you're gone. You can also set up a separate pet trust to set aside funds and instructions for doing so.
7. Don't wait
There's no time like the present to get moving on your estate planning goals. It's best to tackle this subject while you are clear-headed and not facing difficult decisions, so you can weigh all of your estate planning decisions carefully and objectively.
Quite simply, the time to start getting your estate plan in order is now.
8. Don't think you're done
While the majority of your “work" will be completed once you have every completed, signed estate planning document in hand, the truth is that your estate plan is living and breathing as long as you are.
You must update your documents whenever major life changes occur—births, deaths, marriages, divorces, property acquisitions—to ensure that your wishes are expressed and that your estate plan still includes everything (and everyone) you want to include.
You may want to review your documents annually around your birthday so you keep things current: Mark your calendar as you would for any other important event.
Do you really need an estate plan?
Yes, you do. Even if you don't have a lot of possessions and think you have a fairly straightforward situation, planning for unforeseen events now can save your loved ones a lot of hassles later and ease the burden on them during what will already be a difficult time.
Moreover, having an estate plan in place can put your own mind at ease, knowing your affairs will be handled according to your wishes.
If you follow the simple dos and don'ts of estate planning discussed here, you'll be well on your way to making sure your affairs are in order. Get started today!