As much fun as it is to daydream about how you would use a large sum of money if you inherited it, accounting for the assets and liabilities you actually have is a lot less fun. If it is an unpleasant task to take stock of your finances when preparing your income tax return because the possible outcome is that you will end up owing money to the IRS instead of receiving a refund, think of how daunting estate planning can be. Trying to provide for your own long-term care can be even worse, but a knowledgeable lawyer can help reduce the emotional and financial stress.
Estate Planning Factors to Consider
Meeting with an estate planning attorney is the second step in the estate planning process. The first step is to prepare a list of your assets and liabilities to show to the lawyer at your first meeting. Answer the following questions and gather documents to show evidence of them.
- List your assets, including your home and other real estate properties, bank accounts, retirement funds, business interests, and stock market portfolios. If you are married, specify whether each one is in the name of both spouses or just one.
- List all your debts, including home mortgages. Subtract your debts from your assets to determine your net worth.
- Compile a list of usernames and passwords to any online accounts you use to make purchases, payments, or other financial transactions so that your heirs can access this information when necessary.
- List all your life insurance policies.
- Choose several people as candidates to be executors of your estate and guardians of your minor children, if you have them.
Long Term Care Factors to Consider
Besides the estate planning factors, which will determine what will happen to your money and worldly possessions after your death, it is also important to plan for what will happen if you become too ill to make decisions. It is a source of family conflict when a relative dies without having planned for his or her estate, but the battles that can rage over the medical and financial care of an infirm relative are potentially even more bitter. These are some factors to consider.
- Whom do you appoint to make decisions about your medical care if you become incapacitated?
- Whom do you appoint to make financial and legal decisions on your behalf if you become incapacitated?
- If you suffer a catastrophic illness or injury, what efforts do you want doctors to make to prolong your life?
You will want to discuss documents such as power of attorney and medical advance directive with your lawyer. You can avoid disastrously costly and stressful situations in the future if you discuss these matters now.
It is important to start the estate planning process when you are healthy enough to think clearly about it. Once you have a plan, you will not need to modify it unless there is a major change to your financial situation. Consulting an estate planning lawyer from Ferguson, Rawls, & Raines can make the process a lot less stressful.