Last Updated: November 11, 2014
Although it's time-consuming and may feel uncomfortable to make
financial and long-term care decisions, it's more problematic when
these decisions are never made. Estate planning is one arrangement
that your family should consider making, to avoid family fights,
legal fees or government possession later on - and it doesn't have
to be difficult. Learn about these simple steps for estate planning
to ensure that you and your loved ones make sound financial
Benefits of Estate Planning
Estate planning is an arrangement where assets are transferred
to loved ones following a death. Some of the benefits of estate
planning include using a
last will and testament to specify gifts for family members and
loved ones after your death. However, if arrangements are not made,
the government can decide what happens to an estate, one's
possessions, property and money. This is why estate planning
is so crucial and important for a family.
Top Estate Planning Documents to Create
In addition to a last will and testament, a power of attorney
and health care directive should also be created. These two
documents communicate wishes regarding one's financial and
Power of Attorney: This gives another party the legal authority
to act on one's behalf in order to manage legal and financial
affairs when a loved one no longer can. Power can be designated to
be very broad to allow complete control or limited to a specific
Health Care Directive: This specifies a choice for medical
treatment when one is no longer able to communicate or provide
consent. It also allows for someone to be designated to make health
care decisions when an individual is no longer able to do so.
Steps to Creating a Last Will and Testament
When creating a last will and testament for a loved one, be
aware that you will need to follow these important steps:
- Appoint an Executor for the Will
An executor will administer the estate and is responsible for
collecting the assets of the estate, paying any debts of the
estate, paying state and federal taxes and then distributing the
assets of the estate in accordance with the direction of a will.
When selecting an executor, ensure that this person can be trusted
and will be able to handle financial matters prudently.
- Update the Will
In order to maintain a valid will, your will should be updated
when certain events happen. Use a
Codicil if you change your executor, guardian or you've made
simple changes to your last will.
- Create a New Will
Get married or divorced. Need to add or remove a beneficiary.
Already have one or more codicils attached.
Putting a Last Will & Testament into Action
When a loved one has passed it can be a difficult time, however
with their Last Will and Testament in order it is one less thing to
To put a Last Will and Testament in action the executor must
file it at the probate court. The probate process includes ensuring
that the will is valid, paying off any outstanding debts,
identifying property and handing out inheritance to the heirs.
Getting Started on Estate Planning
Starting estate planning may seem daunting; however there are
great resources such as LawDepot.com, the leading
publisher of do-it-yourself legal documents with all the estate
planning documents available to help.
Step by step questions will walk you through creating a legal
document, and a free, one-week trial is available to get