As we come to the end of 2013 and begin to make plans for 2014, it is natural to ponder how many of us actually remember their 2013 New Year’s resolution. Perhaps it was to exercise more, eat less, or maybe to meet with an attorney to discuss setting up your estate plan. Hopefully you achieved your goal. If not, here are a couple of suggestions on how to get started with accumulating the information you will need to set up your estate plan:
First, you will need to make a list of everything you own. What is your home worth? How much do you have in life insurance? What is in your retirement account? How much do you have in savings, etc?. Next consider your debt. How much do you have left to pay on your mortgage? Do you have outstanding loans and/or credit card debt? Once you determine the difference between what you own and what you owe, you will have a good idea of your net worth. This is the amount of money that will be available after you pass away.
At this point, you can assess if you will have enough liquidity to pay your final expenses such as your funeral and any outstanding debt, and if there will be money left to take care of your family’s needs. If you feel there are adequate resources, you can then determine how the assets will be distributed. Is it your spouse, children, grandchildren, friends or other relatives, a favorite charity, etc.? If there are insufficient funds to take care of your final expenses, you may want to consider strategies to build up your savings or pay off your debt. You may also want to think about taking out more life insurance to build up your estate.
Finally, you will want to be certain that you have taken steps to ensure that your family receives your assets after your death. Are the beneficiary designations up to date on your life insurance policies? Have you met with your attorney to draw up the necessary documents; a living trust, will, property power of attorney, healthcare power of attorney, etc., that will drive the distribution of your estate to those you want to inherit your assets? Without the proper documents you have no control as to who gets what and when. Once the documents are in place, you will want to review them periodically to keep them up to date.
As the year closes and a new year begins, there is no time like now to get your affairs in order. The peace of mind that comes with knowing you have secured your family’s future will be well worth it!
Latest posts by SinclairProsser Law (see all)
- How Often Should I Meet with an Estate Planning Attorney? - January 18, 2018
- Tax Law Changes for 2018 - December 29, 2017
- Dedicated Gardeners & Creative Spaces in Annapolis, MD - May 30, 2017