5 Tips for Getting Started with your Estate Plan

Do you have your estate plan?  If not, what are you waiting for? Every adult needs an estate plan, even if it is a simple Will.  Here are 5 easy steps to help you get started on your estate plan and protect your family and assets.  To create a comprehensive estate plan, you will need to gather information and make some important decisions. 

Make a list of your current assets and liabilities.

To start the estate planning process, you should have an understanding of your current financial situation.  You can do this by listing all of your assets and liabilities to help your estate planning attorney (or tax attorney) determine your net worth and any potential tax liability.  It is also necessary to gather all of your important financial papers such as recent tax returns, bank statements, investment and retirement account statements, loan documentation, and copies of your insurance policies.

Determine your estate planning objectives.

The next step in the estate planning process is to determine your objectives (what you want to accomplish).  Some objectives include providing security for the surviving spouse; providing for an incapacitated family member; providing educational opportunities for a beneficiary; minimizing federal and state estate or inheritance taxes; naming guardians or trustees for minor children; or transferring specific property to specific people.  Your objectives will guide you through each step of the estate planning process.

Determine who will receive your assets.

In Maryland and the District of Columbia you can disinherit anyone except your spouse (unless your spouse waived his or her rights in a premarital or post-marital agreement).  First determine your beneficiaries (those who will inherit your estate) and what you want to distribute to your beneficiaries.  Then determine what happens to your estate if a beneficiary predeceases you (dies before you) or if a charity you choose no longer exists at the time of your death.  In this case, you will need to name what are called contingent beneficiaries who will inherit your estate if a beneficiary predeceases you.

Depending on the beneficiary’s age, health, and family and financial situation, you may need to delay distributing your estate to that beneficiary or create a trust to manage the assets for that beneficiary. Your estate planning attorney will walk you through the needs of each beneficiary and then help you decide what to do for each one.

Choose someone to be in charge.

This is probably the most important step in the estate planning process.  You need to carefully consider who will act in your best interests if you become disabled or who will act in your beneficiaries’ best interests after you die.  Your estate plan will also include forms for you to name specific fiduciaries to act on your behalf either during your lifetime or after your death. Your estate planning attorney will help you decide who to choose and explain the function and role of each fiduciary.

Find an Estate Planning Attorney

The final step is to choose a competent and experienced estate planning attorney who will walk you through each step of the estate planning process so you fully understand why and how you should take action to protect your family and assets.

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