A well-organized estate plan comes together when properly planned and executed. To help you get started, follow these steps.
1. List assets and debts
Start your estate planning by listing all your assets and liabilities. When considering assets and liabilities, be sure to include:
- Homes, including mortgages
- Retirements accounts
- Bank accounts
- Investment accounts
- Cars and vehicles, including loans
- Health savings accounts (HSA)
- Life insurance policies
2. Create a will
Drafting a will lets you specify exactly how your assets are distributed to your beneficiaries. Importantly, it’s where you can name guardians for any minor children. When creating a will, choose an executor to manage your estate and carry out the details of the will. If you need help creating a will, consider working with an estate planning professional.
3. Establish trusts as needed
Depending on your situation, creating trusts may be an important step of estate planning. Trusts are useful for achieving specific estate planning goals, like avoiding probate, providing privacy. But you can’t name guardians in a trust, and drafting one is generally more expensive than with a will. Wills and trusts are different, so consider both during estate planning. Edward Jones Trust Company can help you determine if a trust is right for your situation and goals.
4. Designate your beneficiaries
Your beneficiaries are everyone who will inherit your assets and accounts. Over time, and especially at milestones (births, deaths, divorce, etc.), consider revisiting or updating your beneficiary designations to ensure your assets go to the individuals you intend.
5. Establish an estate administrator
An estate administrator is someone who serves as a legal representative after death. Anyone can serve as an estate administrator, though it may be best to choose a third party who is not emotionally involved.
6. Consult a financial advisor
Planning an estate can be complicated, especially for large estates with a mix of assets and multiple beneficiaries. Your financial advisor can work with your tax, legal and estate-planning professionals to help ensure you have an estate plan that matches your goals.
7. Revisit and update your estate plan
As your estate grows along with the size of your family and life events occur, updating your estate plan is essential. You don't want to forget any new family members, and new assets may not be considered under the existing estate plan. In general, plan on revisiting your estate plan every several years to keep it up to date.