When you hear the word “estate,” you may picture a massive mansion. While that would certainly qualify as an estate, it may surprise you to know that everyone—even those without sprawling mansions—has an estate.

An estate in the legal sense is everything that you own from your car and home to your checking account and investments. Regardless of the size or worth of these items, they make up your estate.

No matter what you own, it’s best to make an estate plan. The estate planning process may seem intimidating, but it’s an important step to take. You may not be comfortable thinking about death, but it’s something that none of us can avoid.

It may seem stressful to create an estate plan, but Very Law in Pittsburgh can help. This blog post will detail how to get started with estate planning and how to make the best decisions for your family.

How to Make an Estate Plan

When you make an estate plan, you will need to determine how your assets will be handled and distributed after you die. Estate planning considers management of your properties and financial obligations if you become incapacitated or when you pass away.

Many people mistakenly believe that an estate plan is only for the rich. While those with more assets will have more to divvy up amongst their surviving kin, everyone has assets they should consider listing in an estate plan.

Assets could include homes, cars, works of art, personal property, stocks, life insurance policies, and pensions. You may also have to consider any remaining debts. Estate planning allows you to preserve family wealth, provide for your surviving spouse and children, and fund education for children or grandchildren. You may even choose to leave something to a charitable organization if you wish.

At its core, estate planning involves writing a will, which is a legal document that provides instructions for how a person’s property and custody of any minor children should be handled upon death. You can express your wishes and name a trustee or executor to fulfill these intentions after you die. Living wills are also ideal if you need medical treatments and whether or not you want certain implementations to keep you alive. 

In addition to the will, you will want to name a guardian for your living dependents, choose an executor of your estate to uphold the terms you’ve set, set up funeral arrangements, add beneficiaries on your life insurance, IRA, and 401k, set a power of attorney, and limit estate taxes by setting up trust accounts for your beneficiaries.

This may seem like a tall order, but these steps can help you get started.

List All Assets

Start by making a list of every asset that includes any real and personal property such as your home, jewelry, bank accounts, savings accounts, your life insurance policy, personal possessions, and annuities.

List Your Debts

If you owe anything, such as car loans or mortgages, you should list these debts as well.

Look at Your Retirement, Insurance, and Annuity Accounts

When you first set up your 401k, IRA, life insurance, or annuities, you were prompted to list a beneficiary. Make sure the person listed is who you want to receive the benefits of this account as this will trump whatever your will states.

Name an Estate Administrator and Power of Attorney

Someone with power of attorney can help ensure your wishes in life are being fulfilled if you are incapacitated. Your estate administrator will take over all financial matters after you die.

Write the Will

One of the most important pieces of your estate plan is to draft a will. It will prevent financial uncertainty while ensuring the things you treasure while alive go to the right family members.

Review Periodically

You should take a look at your will every few years to ensure that you are still happy with the way things will be distributed. If there are new additions to your family, you’ve gained more assets, or someone you had named as a beneficiary passes away, you will want to make changes.

Make Copies

It’s wise to have copies of these wishes in the right hands. Your administrator should have it as well as your attorney, ensuring that there are no disputes about your assets after you die.

Consider Other Estate Planning Documents

As you age, you will want to consider adding more legal documents. Power of attorney can oversee your health, finances, and federal estate tax, and you can also leave letters of instruction to go with all the documents to ensure your funeral is the way you want it.

Putting your financial affairs in order with a valid estate plan is the best course of action. When estate plans are not put in place, it can mean that all your assets are contended by your loved ones.

What Could Happen If You Don’t Have an Estate Plan?

Without estate plans, the state has a protocol it follows. If you become disabled either mentally or physically, only a person appointed by the court can sign on your behalf.

If you die without adequate estate planning in place, any of your assets in your name alone and without beneficiary designations will be distributed per state intestacy laws. Beneficiary designations are important because if you die suddenly, the people you want to give your assets to may only get a small share of them or none at all.

Estate planning is the best choice you can make because it ensures that your loved ones won’t have issues with these assets while they contend with their grief.

How an Experienced Estate Planning Attorney Can Assist with Your Estate Plans

Estate planning may be a difficult topic to discuss, and estate planning law can use confusing terminology. Make a complete estate plan that includes your beneficiary designation and details your estate’s assets. Very Law offers sound legal advice regarding estate planning that can help ensure your wishes are upheld, which is the ultimate goal.