9 Simple Steps to Create an Estate Plan

Organizing your estate might seem overwhelming, but it can be straightforward if you follow these easy steps. A comprehensive estate plan ensures that your assets and possessions are distributed according to your wishes, providing peace of mind for you, and alleviating stress for your loved ones during a difficult time.

1. Establish a Revocable Living Trust

A revocable living trust is a will-alternative to manage your assets during your life and upon your death. Once you create and sign a living trust, you transfer ownership of your assets into it while maintaining complete control over them. One significant advantage is that assets in a living trust bypass probate court, saving time and money for your beneficiaries.

2. Create a Pour-Over Will to go along with your Living Trust

A pour-over will is a last will and testament whose only purpose is to "pour-over" any assets that you may not have had a chance to transfer into your trust before your death. Upon your death, the pour-over will acts as a safety net to capture those assets and move them over into the name of the trust. However, keep in mind that the process of transferring assets under the terms of a pour-over will may have to go through probate, so you should aim to not have any assets left out of the trust if possible.

3. Provide for Minor Children

If you have minor children, your will can designate a guardian to care for them if both parents pass away. Additionally, appoint someone to manage any inherited assets for your children, which can be the same person or someone different from the physical guardian.

4. Create an Advance Health Care Directive and Living Will

An advance health care directive, appoints a health care agent to make medical decisions for you in the event you are unable to make those decisions yourself. A living will, which in California, is made a part of the advance health care directive, specifies your end-of-life medical preferences. It includes instructions on life-sustaining treatments, such as feeding tubes and ventilators, ensuring your wishes are followed when you can't communicate them.

5. Assign a Financial Durable Power of Attorney

A financial durable power of attorney (POA) authorizes someone to make financial decisions and conduct financial transactions on your behalf if you're unable to do so yourself. This would include regular tasks such as paying bills and balancing your bank accounts. This agent is similar to the health care agent described above and can be the same person or a separate person. You should trust this person implicitly as they have broad powers.

6. Update Beneficiary Designations

Regularly review and update the beneficiaries listed in your beneficiary designated accounts, including your bank, life insurance, retirement, and brokerage accounts to ensure they reflect your current wishes.

7. Address Estate Taxes

While most estates are not subject to federal estate taxes, it's important to be aware of the thresholds and any potential state taxes. Consult with an estate attorney or tax advisor if your estate is near the taxable amount to ensure you are employing all the tax-minimization strategies legally available.

8. Organize Digital Assets

Compile a list of your online accounts, including email, social media, and financial accounts, with login details. Designate someone to manage these digital assets according to your wishes after your death.

9. Secure Your Estate Plan Documents

Store your estate planning documents in a safe, accessible place and inform your trustees and agents where to find them. This ensures that your wishes may be carried out promptly and efficiently.

Next Steps...

Organizing your estate doesn't have to be daunting. Follow these steps to create a comprehensive estate plan that ensures your assets are distributed as you wish, providing peace of mind for you and security for your loved ones. Whether you need assistance with drafting a will, establishing a trust, or planning for your children's future, if you're in California, take the first step towards protecting your family's future by scheduling your Peace of Mind Planning Session now.

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