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3 Important Actions To Take Before Drafting Your Estate Plan

Every responsible adult should have an estate plan. An estate plan ensures that when you die, all of your belongings go to the appropriate party. Once you have any assets to speak of, or children to look after, you should have an estate plan. Here are four important steps you should take in preparing your estate plan.

#1 Create an Inventory

Before you head to the lawyer's office, you need to spend some time making an inventory of your assets as well as your liabilities. In order to create an estate plan, you need to have a solid idea of what type of assets that you have to begin with.

Knowing the type of assets that you have when you go to the attorney will help you create an estate plan. Assets include obvious things, such as your home, bank account, and vehicles, as well as not as obvious assets, such as your retirement account, stocks, bonds, and insurance policies.

#2 Think About Beneficiaries

Next, you need to think about who your beneficiaries are. If you are married and have children, it can be more obvious who your beneficiaries are. However, beneficiaries are not always as straightforward as your children and spouse.

Perhaps you helped raise your niece or nephews, and you want to make sure that they are taken care of if you pass away. Or, perhaps you have stepchildren who you want to make sure are taken care of. Or maybe you have a best friend that you would want to help out should you pass away.

Thinking about who you want your assets to go to before you create an estate plan is just another step you can take to make the process of creating your estate plan a smooth one. 

#3 Figure Out Who You Want to Manage the Plan

Finally, you need someone who will carry out your plan. An estate plan doesn't do much good if no one knows that it exists or there is no one to carry out your plans. You need to find someone who is responsible who will carry out and manage your plan. This could be a friend or family member, or you can appoint an attorney or law firm to carry out your estate plan. Many individuals with larger estate plans actually set-up a trust to carry out their estate.

Additionally, many estate plans include advanced health care directives so that someone can make medical decisions on your behalf if you are not able to. You can choose someone different to manage this particular task.

Before you head down to set-up and create your estate plan with your attorney and accountant, take some time to prepare. Create an inventory of all of your assets, figuring out who you want to benefit from those assets, and determining who you want in charge of executing your estate before you start formally drafting your estate plan will make the entire process run smoother.

For more information, contact a company like Bliss & Skeen CPAs.