What is an Estate?
In short, an estate is simply a person’s net worth according to the law. So this can include property, money in bank accounts, vehicles, and even smaller things like jewelry. You can think of an estate, however, as two colors: black and red… This is because an estate is not only about what you own (being in the black), it’s also about what you owe (being in the red). Debts that you left, such as mortgages and credit cards will be deducted from your estate before proceeds are paid out to beneficiaries, such as your children.
This distribution of your estate, that is, what you own, minus what you owe is known as an ‘estate plan’. Estate planning is not only about what you decide to give away, it is also about decisions that need to be made on your behalf when you are still alive, such as whether you would want to be resuscitated or not in hospital. The estate plan is made of documents which have specific purposes. For example, one of these documents might dictate at what age you would like your children to be able to access a trust fund you have set up for them.
Estate Planning Checklist - 5 things to consider
1. Have you created a last will and testament?
This is the most important document in the planning of your estate. If you haven’t created one, do so as soon as possible.
2. Complete a living will and power of attorney
A living will is a legal document that pertains to your healthcare in which you appoint someone you trust to communicate with doctors and medical professionals regarding your treatment plan should you become incapable to make these decisions in your future. Issues discussed in this document can include things like feeding and breathing tubes, and other forms of life-sustaining medical treatments.
A power of attorney allows you to name someone to be in charge of making all-round decisions for you if you become incapacitated. You might decide to name someone to conduct your medical decisions and another to make financial decisions.
3. Compile important documents and contact details
Gather documents such as birth and marriage certificates, vehicle licenses, property deeds and contact information for your insurance company, attorney and doctor, and keep them in a safe place. This will make compiling your estate plan a whole lot simpler and will make it easier for your loved ones at a later stage.
4. Consider your digital assets
What with technology and social media being such a huge factor in our lives today, you may have online accounts that need managing when you’re gone. Some social media platforms give you the option to select someone to take over your account upon your passing. You should also think about any other online activities in which you participate.
5. Make final arrangement plans
These types of arrangements might be difficult to tackle but they may be of importance to you and sorting them out will make things more simpler for your loved ones. They can include funeral plans, donating your organs and how these will be paid for.