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Getting started with estate planning

On Behalf of | Feb 12, 2024 | Estate Planning

Estate planning is something that can be easy to put off for various reasons. No one likes to think about dying and leaving their loved ones behind.

Additionally, estate planning may seem complicated and overwhelming. However, following these few simple steps can help you get started with your estate plan.

Make a list of everything you own

You might believe that you do not own enough to create an estate plan but most people own more than they think.

Your list should include physical and non-physical property. Physical property includes homes, real estate and other personal possessions. Non-physical property includes bank accounts, investments, retirement plans or insurance policies.

Once your list is created, determine who you would like the property to go to.

Do the same for your debts. Although your debts do not get distributed to heirs, they must be paid after your death, commonly with your assets.

If you have children, select a guardian. This is someone who assumes legal responsibility for your children if you pass away.

You are then ready to have a will drafted. There are requirements for a valid will in Pennsylvania so it is best to visit a professional to ensure your will is properly drafted an executed.

Consider what else you might need besides a will

Many people assume that an estate plan means having a will but there are other documents that may be necessary to create a complete estate plan.

Powers of attorney allow you to choose who makes important decisions for you if you become incapacitated. A medical power of attorney permits someone to make healthcare decisions for you while a financial power of attorney does the same for financial decisions.

Trusts are another estate planning tool to consider. You place your assets into a trust and they are managed by a trustee. Trusts can be revocable or irrevocable and go into place while you are still living or after your death.

Review your retirement and insurance policies and update beneficiary information. Without a beneficiary, the proceeds could be distributed according to Pennsylvania’s probate rules, which may not be what you want.

Finally, review the tax impact of your estate plan. Determine if your estate will be subject to any estate or inheritance taxes.