As we have seen in 2020, life can be filled with unpredictable, sometimes dire changes and events that can completely alter the course of our lives. There will always be certain circumstances we cannot impact, but there are those that are in our control and that we can define based on what we want. That, for instance, includes estate planning for your future, and making sure that all of your wealth and possessions end up in the right hands upon your demise. It might seem a bit too dark to think that far ahead from this perspective, but it’s wise to set up a legal basis for your actions and protect your assets.
This can be a complicated process and one that can differ depending on the laws of inheritance in your country, hence the need to educate yourself in time. Here, we’ll outline a few of the most effective strategies that can help you legally protect your wealth, distribute your estate, and of course, brace yourself and prepare your family for the future.
Assign a power of attorney
As you grow older, the risk of certain illnesses becomes greater, and of course, accidents can happen, which might lead to you becoming unable to make your own decisions anymore. In such situations, you need to make sure that, first of all, a medical professional declares whether or not you are able to make decisions and to what extent, or if someone should take over and be given a power of attorney.
This type of documentation is often not too expensive to obtain and draft with your attorney, but you should get educated on your local power of attorney laws. Make sure that you know what kind of decisions your family can make: whether they have medical or financial power of attorney. The former means they can decide on your health and necessary care, while the latter refers to your finances.
Make sure your will is valid and legal
The main way to ensure your wealth, your estate, and all of your possessions end up in the right hands is to write up your own legal will. This legal document simplifies the distribution of estate and allows you to clearly state who in your family should manage your assets after your demise. What’s vital here is that you follow the legal requirements of your state and consult an attorney to go over the document with you.
Upon review, you can make any necessary changes to ensure the legality of your will, and then you’ll make the process significantly simpler once it’s time to distribute your assets and estate. This will also prevent your family from having to go to a court of law and spending thousands on proceedings that would be both time-consuming and emotionally difficult.
Keep your paperwork in good order
Another smart way to plan ahead and keep everything under control is to make sure that all of your paperwork is kept in a few safe places and that you have copies your family members can access in case anything happens.
For example, as you’re preparing for your retirement, make sure all of your life insurance, health insurance, as well as your tax-related paperwork are in order. Also, if your local law permits it, you can use a digital storage space for making copies of your will and keeping this and other types of paperwork safely on the cloud, in case anything happens to the original or the hardcopy. Of course, your lawyer should always have either the original, or at least a copy.
Talk with your family members
Not all conversations are comfortable. We can safely say that talking to your spouse, family, and other relatives about what happens to your estate and possessions after your passing is not one of those “easy” conversations. However, they are necessary, and they can be done in a certain, efficient way, so that you cover all of your bases without wasting time or making anyone feel too uncomfortable.
Now that you have created a will with your attorney and you know what you want to do in case something were to happen to you in the future, you should tell your family members what they can expect. Encourage them to ask questions, and get everything out in the open, to talk honestly and transparently about the future. Some important questions to cover:
- Who inherits what based on your will?
- What kind of “end of life” policy do you have in place?
- What does your life insurance cover?
- Have you covered the costs of your own funeral in the will?
- Who will take over your medical decisions in case of an accident?
Thinking about the future in this practical and calculated way might not be your ideal way to spend an afternoon, but it will certainly help you ensure that your possessions and your wealth go to the right family members, and that everyone is covered in case you become incapacitated. Accidents happen, and things might not always go as planned, so start creating a plan to protect your estate and assets, and your mind will be at ease.