How to tackle estate planning basics in 6 steps
Cash is fanned out from a wallet in North Andover, Mass, June 15, 2018. Credit: AP/Elise Amendola
Contemplating your own death or disability isn’t particularly pleasant, but estate planning can bring peace of mind for you and your family.
Here are the key steps to take.
Step 1: Find a qualified attorney
Because your estate plan will likely need to be updated as the years go by, it makes sense to find an attorney who practices in the community where you live.
Start by asking other financial professionals who you work with for recommendations. If you have a specific situation that is likely to affect your estate plan—for example, if you’re a small-business owner or if you have a child with a disability —ask for referrals to attorneys well-versed in those areas.
Conduct a basic informational interview with prospective attorneys (it should be free), and ask the following:
Remember to weigh the intangibles: Do you like this person, and would you be comfortable supplying them with personal information about your finances and family situation?
Step 2: Take stock of your assets
List your assets and their value: investment accounts, life insurance, your home, your share of any businesses you own. Gather current information about any debts outstanding. Your estate-planning attorney is likely to provide you with a worksheet for this.
Step 3: Identify key individuals
Who do you trust to ensure that your wishes are carried out in case of your death or incapacity? You’ll need individuals to fill the following key roles. Note that the same individual can fulfill more than one role.
Step 4: Know the key documents you need
At a minimum, ask your attorney to draft:
Step 5: Manage your documents
Once your estate-planning documents are drafted, destroy any older versions. Keep the current ones in a secure place and tell the executor where they are.
Provide copies to your executor, agents for powers of attorney, and the guardian for your children, and discuss your wishes with them.
Step 6: Plan to keep your plan current
One of the biggest estate-planning pitfalls is drafting a plan but not keeping it up to date. Plan to notify your estate-planning attorney, and possibly revise your documents, in these situations:
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