It can be difficult to plan for your estate after you die. This is because it’s hard to predict what will happen and how much time you have left. It’s also hard because there are many different strategies that you should consider when preparing for your estate’s future! We recommend six important steps in this article, which will help you prepare your estate for death.
1. Sign a will
Your will is the legal document that outlines what should happen to your estate. This includes all of your assets, who gets custody of your children or pets in case you die, and how money from your estate should be distributed among beneficiaries. It also ensures that those entrusted with these decisions are legally authorized to make them when it is most important.
2. Create a living will
A living will is a document that outlines what types of medical treatments you want to be administered to you in case of an emergency or when there’s no hope for recovery. This lets your loved ones know the type of care you prefer and ensures they receive this care even if it differs from what doctors recommend at the time.
For example, some people choose to include a DNR (do not resuscitate) order in their living will. This means they do not want CPR administered if their heart stops beating or if they stop breathing, even if doctors believe there is hope for recovery.
For most Americans, it’s recommended to have both a living will and a healthcare proxy in place—this is the person who makes these decisions for you if your situation becomes too difficult to handle yourself. This ensures all of your wishes are known ahead of time without any confusion or second guessing!
3. Discuss your wishes with family members and friends
Your family will be the ones that need to carry out your wishes and make decisions about your estate, so they need to know what you want ahead of time. To avoid confusion or conflict among loved ones after death, we recommend discussing these issues with your spouse/partner and any children under 18 years old or other trusted friends or family members.
This makes it easier for everyone because your wishes are already known, and there is no need to guess what you would have wanted in a difficult situation. Consider meeting with an estate planning attorney before starting this conversation. Hence, you feel confident that your plans are legally sound and will be followed by family members, even after you’re gone.
4. Update beneficiary information for retirement accounts, life insurance policies, and other assets
When you first buy a retirement account or life insurance policy, your primary beneficiary is typically the person who receives the money in case of death. However, it’s important to update this information regularly as relationships change over time!
For example, once you have children, they should be listed as beneficiaries on any accounts meant for them—like 529 college savings plans. You should also update your will and living will to reflect this change if something happens while the kids are still minors (or if you want them to receive money when they turn 18).
You’ll want to make sure your insurance will cover any leftover hospice bills if needed. It ensures that you can contact a hospice billing company.
5. Name an executor to carry out the terms of your estate plan
The executor of your estate (also called an administrator or personal representative) is the person who manages everything after you’re gone. This includes selling property, ensuring debts are paid off and taxes filed, notifying beneficiaries to expect money from your will, etc.
An executor can be a family member or friend—they must handle a lot of responsibility and paperwork, especially if your estate is complicated. For example, an executor must be willing to take on the task of ensuring all debt is paid off before distributing assets—otherwise, they may have trouble selling properties or cashing out accounts.
6. Make sure you have made arrangements for funeral or burial expenses before your death
It’s important to understand that your estate will be responsible for all funeral costs when you pass away. This means the money from life insurance, savings accounts, and retirement funds can go towards paying off debts or giving assets to beneficiaries–not covering a large expense like a funeral service.
To avoid this situation in case of death, make sure you have enough life insurance to cover your funeral expenses–or you can set up a special savings account just for this purpose.
It’s important to take the time to prepare your estate before you die. We’ve given 6 strategies for how you can do that today. Now, all you have left is deciding which one will work best for your situation.