Nearly 60% of American adults do not have an estate plan, such as a will or power of attorney, according to a recent Caring.com survey. What’s more disturbing is that less than 40% of families with young children have designated a guardian to care for their kids if they die.
Creating an estate plan is not just about giving away your property when you die. It is an essential part of financial planning regardless of your age, income or the amount of wealth you have accumulated.
How do I build an estate plan?
Besides protecting the financial future for you and your family, an estate plan is primarily about giving yourself peace of mind by protecting your interests. The key steps include:
- Drafting a will: A will lets you decide how to distribute your assets after you die. You appoint an executor to carry out your instructions. If you die without a will in place, a court here in Nebraska will choose your beneficiaries and determine who gets what.
- Consider a revocable living trust: This option transfers your assets into a trust that you control and can avoid probate proceedings. A trust allows your possessions to immediately be transferred to your loved ones according to your wishes. Depending upon the size of your estate and because of Nebraska’s simplified probate process, you and your attorney may decide it’s not the best option.
- Review beneficiaries: Examine beneficiaries for all your financial accounts that live outside your will, such as life insurance policies and retirement accounts, and make sure they are up to date and match your wishes for how you want the funds to be distributed.
- Create a durable power of attorney: It’s essential to name a friend or family member you trust to make financial decisions for you if you become ill or injured and can’t make those decisions for yourself.
- Healthcare proxy and advanced directive: A healthcare proxy makes medical decisions for you if you are incapacitated much the same as a power of attorney handles your financial affairs. An advanced directive, also known as a living will, gives specific instructions on the types of medical procedures you want, including for end-of-life care.
Be organized and consult an attorney
An experienced estate planning attorney here in Nebraska can help you through the process of determining the best plan for you and protecting your family’s future. Once you have a plan in place, remember to inform your executor and other critical members where your documents are located. Also, remember to review your plan often and make necessary changes when major life events occur.