Many people neglect to take all of the necessary estate planning steps prior to their death, leaving their loved ones to clean up the mess. Currently, more than half of all American adults do not have a will or any other form of estate plan in place. In this situation, your loved ones will not only suffer the grief of your death but also the additional stress of dealing with your estate. In order to avoid this additional burden, here are a few steps to consider:
Life Insurance – Do you have enough life insurance? Life insurance can have multiple purposes. In the event of your death, it can provide for your loved ones, replacing the income you would have contributed. With this in mind, you usually want 10 times your salary as your life insurance policy. However, as your children leave the nest and/or you pay off your mortgage, you may decide to continue your coverage in order to provide for your eventual funeral and burial costs. These types of expenses are often overlooked but are important to consider when putting together your end of life plans!
Will – A will is a legal document that can specify who will inherit specific personal possessions. It can also ensure the security of your children by naming the person you prefer as a guardian, provide for any future care of pets, and specify how you would like your final expenses to be handled. A will can be a useful tool to indicate your preferences and smooth the transition of your assets after your death. However, with or without a will, your estate may still end up in Probate court. Probate is the process of validating a will and retitling property after a person dies. This can often be a lengthy and expensive process, even with a Will in place.
Trust – If you are looking to help your estate and your loved ones avoid probate, a Living Trust can be a powerful tool. You can transfer all of your assets into a trust and outline the beneficiaries of each of the assets. Upon your death, all the assets automatically flow into the trust, making it possible to avoid probate court. With a trust, you can also control how cash and property are given to your beneficiaries. For example, you may stipulate in a trust that you wish to spread out the dispersal of funds over a period of time. With a revocable living trust, you can change or cancel the trust if needed. In certain circumstances, you may also want to establish an irrevocable or special needs trust. It is important to talk to an estate planning professional about which options are right for you and your family.
These are just a few estate planning options you can and should consider. Help make your loved ones’ lives easier by properly preparing your end of life plans. Contact Horn & Johnsen today to speak to an estate planning professional and find out more about the steps you should be taking: https://hornjohnsen.com/contact-us/