Inheritance planning, also referred to as estate planning, is something that every adult should begin early on in life. By starting early in life, you ensure that your assets are protected as they grow and that your loved ones are well cared for in the unlikely event that something happens to you. Of course, if you have never created an inheritance plan you undoubtedly do not know where to begin. To help get you started, the inheritance planning attorneys at Nash Bean Ford & Brown, LLP explain inheritance planning steps for the beginner.
Steps to Inheritance Planning
Before you sit down to create your inheritance plan, read through the following steps to help you create a thorough and cohesive inheritance plan.
- Choose your attorney. Given the importance of your inheritance plan, going the “Do-It-Yourself” route should not be an option. While it is true that you can find a wide range of estate planning “fill-in-the-blanks” forms on the internet, the odds are high that the form you use will have significant errors and/or omissions that could ultimately cost your loved ones a significant amount of time and money. Instead of risking the success of your plan by going the DIY route, consult with an experienced inheritance planning attorney about your inheritance plan.
- Define your goals. Although your initial inheritance planning goal may be the distribution of your estate assets after you are gone, a well thought out plan can help you achieve numerous other goals as well, such as incapacity planning, protecting the inheritance of a minor child, or Medicaid planning to ensure you can afford the high cost of long-term care if you need it as a senior.
- Assess your assets. You undoubtedly have a fairly good idea of what assets you own; however, for the purpose of creating an inheritance plan you should make a detailed list, including current value, location, and identifying information (account number, registration number, lot number etc.)
- Assess your liabilities. Make the same list for your liabilities that you made for your assets.
- Identify your beneficiaries. Most of your beneficiaries will be obvious, such as your children, but there may be a few less obvious beneficiaries on the list. Your pet, for example, or a favorite charity might be included once you give it some thought.
- Choose your fiduciaries. Choosing your fiduciaries is one of the most important decisions you will make when creating your inheritance plan. This is also where people frequently make costly mistakes. Before appointing a spouse, adult child, or best friend as your Executor, for example, stop and consider if that person is really the best choice for the position. The same holds true for naming a Trustee for a trust you create as part of your plan. A Trustee’s duties and responsibilities are numerous and varied and ideally require a background in law or finance. You may wish to consider a professional Trustee to ensure that your trust is successful.
- Execute documents. A surprising amount of litigation centers on improper execution of estate planning documents. To avoid this, make sure that your documents are executed properly, pursuant to the laws of the state. If you work with an estate planning attorney, your attorney will make sure everything is properly executed and can act as a witness to your state of mind at the time you signed each document in case that ever becomes an issue.
- Review and revise your plan. Among the most common mistakes people make when inheritance planning is failing to review and revise the plan they create. To ensure that your plan covers all your current needs, make sure to review the plan every few years as well as when a life event, such as divorce, calls for a revision.
Contact an Inheritance Planning Attorney
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns regarding inheritance planning, contact the experienced inheritance planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.