Having your estate in order is a very important task. Many people's estates are in disarray, and a significant number will not realize this by the time they pass on. This will leave their families with the difficult task of figuring out what assets and debts they had and how these will be divided.
Wills and Trusts
These are some of the most important parts of estate planning. Without a will, you have no control over who gets what after you die. Trusts ensure that certain parties will be taken care of in the event of your passing, or if you're unable to take care of them.
Setting up a trust is important for people who have underage beneficiaries or those with special needs. Some trusts also give money to charities.
Power of Attorney
A lasting power of attorney is very important, yet it is often overlooked by many estate owners. If you're found to be mentally incompetent at some point in your life, the person that you previously granted power of attorney will be charged with making decisions for you.
Not all your property will be passed down through your will, e.g. a 401(k) plan. Such accounts need to have a beneficiary and a contingent beneficiary.
If a beneficiary isn't named on such accounts, the court will decide the fate of the funds, and this may not always be done to your liking. A contingent beneficiary is the one who'll receive the funds in case the primary beneficiary is unable to do so.
Letter of Intent
If you have any specific thoughts regarding what should be done with an asset in the event of your death/incapacitation or details about your funeral, you should leave a letter of intent with to your executor or a beneficiary. This document isn't always valid, but it can help to inform a judge of your intentions and this can help in certain matters.
Health Care Power of Attorney
Doctors may need to make an important decision regarding your healthcare. This may not be possible if you're incapacitated. Family members don't always make the right decisions, and having financial factors in play may not help. Therefore, you should draft a health care power of attorney, designating who should make these important decisions for you.
Hiring an estate planning attorney is one of the most important steps you could make when trying to organize your estate. An attorney will be able to guide you and show you what needs to be done.