One of the first steps you need to take is creating a will. This will include a plan on how your assets are divided among your beneficiaries. It will also include who will be in charge of your estate (the executor) and any plans you would like in place following your passing.
An executor’s responsibilities include: taking inventory of the estate, paying bills, cancelling credit cards, and making sure requests in the will are fulfilled. This person will also be responsible for filing your final personal tax income following your passing. When selecting an executor, talk to them and make sure they understand the responsibilities associated with this job. This person should be someone you trust and with whom you feel comfortable sharing financial information. You can also name a third party, such as a bank or attorney to be the executor of your estate. Name an alternate in case your first choice is not able to take on the responsibility.
A trust will hold your assets and distribute them in the way that is outlined in your will. For example, if you have children, you can set up a trust that distributes money to them as opposed to a lump sum. This will help control how the assets are used when you are no longer able to control them.
This is the person who will make financial decisions based on your wishes if you become unable to. When arranging this, make sure you are very clear in the circumstances in which this person will take over your financial decisions. For some people, they become responsible for finances the moment you become incapacitated. In other cases, they may always be power of attorney but will only start making active decisions once you become unable to. Name an alternate in case your first choice is not able to take on the responsibility.
This is the person who will make medical decisions on your behalf if you are unable to. Another option in place of this is a living will. This will outline your medical wishes, such as being taken off life support, in writing. While having either option in place is ideal, keep in mind that a living will is a stagnant document while a medical power of attorney will be able to make decisions in real time that are aligned with your wishes. Name an alternate in case your first choice is not able to take on the responsibility.
Disclaimer: This guide is meant to be a helpful starting point and not as legal advice. As every situation is different, speak to a financial professional or attorney before beginning your estate planning.