7 Basics of Estate Planning

Posted by Alan Finkel on August 17th, 2022

Not many people realize the significance of estate planning, at least not until they start to feel too old or too ill. Estate planning has nothing to do with death or terminal illness, but it is a reminder of mortality. People do not want to think about what happens in the event of incapacity or them passing away. Estate planning is a means of protecting your future and ensuring that your loved ones are taken care of when you are no more with them.

The right time to start upon an estate plan is right now, though this is not something to accomplish through a DIY approach. Newport Beach Estate Planning Attorney can help you create an estate plan that tailors your unique needs and goals. Nonetheless, you must first acquaint yourself with the basics of estate planning:

1. Itemization of Assets

All your possessions, regardless of their monetary value, are assets of your estate. Certain things have emotional significance that outweighs the value of more costly items. Everything that is now yours will ultimately be passed onto your lawful heirs or intended beneficiaries. In order to ensure fair split and distribution, it is useful to enlist everything whilst determining its current market value.

2. Simplification of Estate

Settling a sizable estate that is worth a lot of money can be quite cumbersome. Your loved ones may have to wait years before receiving their fair share of assets if you don't take steps to avoid probate. Donating or transferring maximum of property during your lifetime can help streamline your estate.

3. Making arrangements for end of life care

Many people suffer terminal illnesses at later stages of life or become disabled at a younger age due to an accident. A person can become incapacitated at any time without warning, which is why it is wise to make important healthcare or end of life decisions while you’re mentally and physically sound. For example, you can opt out of getting artificial life support or going through painful medical procedures.

4. Contemplation on Final Wishes

People have specific objectives for how they want to be remembered and how they preferred to be disposed of following death. For instance, may orchestrate a lavish burial service or have their ashes flung over a special place after cremation. Conveying your final wishes is far more crucial when belonging to a blended family.

5. Enlisting owed money or debts

It is commonplace to overlook debt because the majority of the population thinks that estate planning only concerns matters of inheritance. It is important to note that the assets in your estate will be used to compensate creditors before anything is transferred to beneficiaries. People or organizations you owe money to can contest your estate, regardless of the contents of your last will.

6. Choosing an Administrator of Estate

You must designate a trustworthy individual to manage your estate after your passing. Any legal adult from the immediate family or anybody else you think qualified for the position can be nominated. This person will handle your financial matters in accordance with authorized directives.

7. Appointing a Guardian for Minor Children

If you have young children (under 18 years of age) then your sudden death would leave them in a compromised situation. They require parental care until legally considered adults because they cannot access and manage your estate. Designate a reliable guardian for your kids, so that their fate is not decided by intestacy.