Planning your estate means arranging your affairs so your loved ones are taken care of when you pass away or become seriously ill. A will is a crucial component of estate planning. You also need lists of your assets and debts with detailed information about all open accounts.
What do you do when someone dies without a will?
Half of all people in the US pass away without a will, which makes it challenging to establish what will happen to their assets or debt. Even famous people aren’t immune to such oversight. Aretha Franklin died without a will in 2018, joining a surprisingly long list of celebrities like Prince.
Sometimes people do have wills, but their loved ones don’t know about them. Thankfully, there are ways to find if someone has a will. When someone dies, their will is filed with the probate court. You can visit the local court or call to find out if a will for the deceased person exists.
Everyone needs a will
Even humble assets should be transferred to the right entity without undue costs or delay. Apart from a will, you should consider documents like a trust and a power of attorney. A trust is a legal document that grants a person named by you the right to manage and supervise the assets you leave behind. A power of attorney grants a person you name the right to act on your behalf if you are incapacitated. You are the principal, and they are the agent.
Put together a list of your valuable items, document intangible assets, make a list of your debts, review your retirement plan, and check if your insurance policy is current.
How to itemize your valuables
Start by listing the things of value you own inside and outside your home. These include the home and any vehicles, jewelry, pets, art, computers, expensive equipment, collectibles, etc. You might decide to leave some things to certain people.
Document intangible assets
Add financial assets with concrete information for your heirs to claim. These include brokerage and bank accounts, IRAs, 401(k) plans, any life insurance, long-term care insurance, car insurance, homeowner’s insurance, health insurance, disability insurance, etc. List the account numbers and provide details about physical documents.
Make a list of obligations
Open credit card debt and other debt should be on a separate list. This might include a car loan, home equity loans, mortgages, and any other obligations or open credit lines.
Review your insurance policy and retirement accounts
Policies and accounts with designated beneficiaries are inherited by them directly when you pass away. The way you direct these policies or accounts to be received in your will is irrelevant. In case of a conflict, the designated beneficiary connected to the account will have precedence.
Likewise, the beneficiaries you name directly inherit annuities and life insurance. Make sure life insurance beneficiaries have been listed correctly and you’ve updated their details.
The administrator of your estate should get a copy of your final will – witnessed, signed, and notarized to have legal effect.