You likely want your loved ones to inherit your belongings when you pass away. However, if you don’t have a plan in place, it will be up to the state to decide who gets what – and it may not be who you would have chosen. Many people put off this task because they think it’s too complicated or they don’t have enough assets to warrant one. But if you want to be sure your belongings end up in the right hands, it’s best to have a plan.
Here are some tips to ensure your possessions go to the people you want them to.
1. Create a will.
This is the most critical step in ensuring your belongings go to the right people. A will allows you to designate who gets what, and it’s the only way to ensure your wishes are carried out. If you don’t have a will, the state gets to decide the people who acquire your belongings, and it may not be who you would have chosen.
Start by making a list of your assets and who you want to receive them. Then, find an attorney specializing in estate planning to help you create a legally binding document. You can also use an online service but choose a reputable one. Find out more about creating a will in your state by visiting the website of your state’s department of justice.
2. Name beneficiaries on your accounts.
For many of your assets, you can name a beneficiary directly. When you die, the asset will go directly to the person you’ve named without going through probate. You can name a beneficiary on your retirement accounts, life insurance policy, and investment accounts.
When doing this, name a primary beneficiary as well as a contingent beneficiary. The former will receive the asset if they’re alive when you die. The latter will receive the asset if the primary beneficiary has died. Always name at least one contingent beneficiary to avoid your assets being frozen if something happens to your primary beneficiary.
3. Put your belongings in a trust.
Another option for ensuring your belongings go to the right people is to put them in a trust. This can be a good option if you have complex assets or you want to control how and when your beneficiaries receive them.
Trusts can be revocable or irrevocable. The former allows you to change the terms, but you cannot change the latter once you have created it. If you create a revocable trust, name a successor trustee to manage the trust after you die. You can work with an expert estate administration attorney to create a trust that meets your needs.
4. Make a plan for digital assets.
Many people have digital assets in today’s world, such as social media accounts, online banking accounts, and email accounts. It’s essential to plan for these assets, so they don’t get lost after you die.
Start by making a list of all your digital assets and their locations. Then, decide who you want to have access to each one. You can name a person as the successor for each account or give them unrestricted access to all of your accounts. Be sure to store this information safely, such as in a password-protected file on your computer or in a safety deposit box.
5. Keep your plan up to date.
Once you have a plan in place, it’s essential to keep it up to date. Review your plan every few years and update it as needed. Be sure to update your will, trust, and beneficiary designations when changes are in your life, such as getting married, having children, or acquiring new assets.
When changing your will or trust, follow the proper legal procedures to ensure the document is valid. Many states have specific requirements, such as having the document witnessed by two people or notarized by a notary public.
You should also keep your digital asset information up to date. Be sure to change your passwords regularly and update your list of accounts and passwords as needed. You want to ensure your loved ones can easily access your accounts when you’re gone.
By following these tips, you can be sure your possessions will be in safe hands after you pass away. Taking the time to plan now will give you peace of mind knowing you will be able to take care of your loved ones. Always consult with an attorney to ensure your plan is legally binding and meets your needs. And, be sure to keep your plan up to date as your life changes.
