Estate planning is not as complicated or stressful as you might think.
Creating a solid estate plan now will lessen the amount of stress on the loved ones you eventually leave behind.
1. Name beneficiaries
Writing a detailed will is your opportunity to ensure the distribution of your assets according to your wishes. Name your heirs and other beneficiaries and clearly indicate what each person will receive from your estate.
2. Include a plan for end-of-life care
In addition to a will, include an advanced directive regarding your health care in your estate plan. This document will make your wishes regarding life-sustaining treatment and end-of-life decisions clear. It only comes into effect when you are unable to communicate your decisions due to illness or injury.
3. Choose trusted people
An executor, named in your will, will take on the responsibility of closing your estate and ensuring the distribution of your assets according to your wishes. A medical power of attorney, named in your advanced directive, will make medical decisions for you if you ever become incapacitated. You may also designate someone as a power of attorney to make financial decisions on your behalf should you become incapacitated. You may assign all these roles to the same person or choose a different trusted person for each role.
You should revisit and revise your estate plan every few years and after major life events. Make sure your beneficiaries are always up-to-date as your family changes in size. Whenever you update your will, remember to update your beneficiaries on any other documents that include beneficiaries, such as life insurance and retirement accounts.