Not surprisingly, part of your estate planning should include preparing or updating a will and trust. These and other important tasks are discussed below. If you have other concerns, contact an estate planning attorney in your area.
Draft or update your will and trust
A last will and testament permits you to determine what happens to your property when you die and, if you have minor children, who should be appointed their guardian. Without a will or estate planning, state laws and the courts will make these decisions. Wills should be reviewed at least every five years and upon any significant change in your family situation (e.g., marriage, birth of child, death of close relative and the like).
Consider establishing a “living trust”
In estate planning, property placed in a “living trust” during your lifetime can pass to your loved ones immediately upon your death – without incurring the additional costs normally associated with the probate process. Furthermore, using a trust will give you much greater flexibility in planning for how and when your beneficiaries will enjoy your property. For example, you could establish a trust that would provide you and your spouse with income for the rest of your lives, with the trust property passing to your children (or to any other persons you chose) after the death of both of you.
Trusts are especially useful if you have minor children – you can have the trust continue after your death until all of your children complete their formal educations or until they reach an age you specify.
Trusts also permit elderly people to plan for the possibility that they might become incapable of dealing with their property some day. Without a trust, it might be necessary to incur the expense and embarrassment of having a “conservator” appointed by the courts to manage your property.
Give certain people copies of your will
Keep in mind that, in many states, safe deposit boxes are often sealed at the time of death and are not opened until the bank receives letters from the probate court. This is why it is probably best to leave the original of your will with your estate planning attorney and keep only a copy in your safe deposit box. It is also wise to give another copy of your will and other important documents to the person you named in your will as your executor or to another trusted friend or relative.
Draft a “letter of instructions” for your survivors
This letter should spell out your funeral wishes, including what kind of a funeral or memorial service you desire, what you wish to happen to your remains and, if you desire to be buried, where you want to be buried. Some people even specify what music they want played at their funeral.
Your letter of instructions should also list the people to be contacted immediately after your death, giving their addresses and telephone numbers, and where your will and other key papers can be found.
Do not place this letter of instructions in your safe deposit box. Give the letter to a trusted friend or relative or leave it where it will easily and quickly be found in the event of your death.
Consider funeral preplanning
Some people prepay for their funerals, while others simply pick out their casket, funeral home and do all the detail work ahead of time.
Preplanning can relieve stress on your survivors and give you control over the ultimate cost of your funeral. The typical funeral ranks after your home, car, and formal wedding as the fourth largest expense you are likely to incur. Today, depending on where you reside, the cost of an average funeral ranges from $5,000 to $10,000. Direct cremations will generally cost less than $2,000.