Six Things To Do Before You Plan Your Estate

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Taking the time to plan out your estate now is one of the most important things you can do for your surviving beneficiaries and loved ones.

Estate planning is a big job. You need to make sure you do the following six things before you get started for the best possible results:

Learn how to minimize taxes

Estate taxes can really diminish the value of assets you're able to leave to your beneficiaries. One of the most most important things an estate plan should do is minimize tax liabilities. 

You should be aware of which of your assets will not be taxable. For example, a Roth retirement account will be a tax free asset. Also, life insurance death benefits will not be taxable. 

You can minimize taxes by making sure that you leave any non-taxable assets to your beneficiaries and using taxable assets for charitable donations. You can also give some of your estate away as a gift before you pass away to avoid estate taxes.

Identify all of your beneficiaries

For many people, the beneficiaries on their estate are just their children or surviving spouse. However, some individuals wish to leave portions of their estate to other dependents or surviving loved ones.

Think carefully about who you want to include among your beneficiaries before you start drawing up your estate plan.

Create an inventory of what you own

You don't want to leave any important asset out of your estate plan. It's a good idea to create an inventory of all of the assets you'll need to divide up.

You should also make a list of all the liabilities you have that will need to be paid off by your estate. Liabilities could include outstanding debt, taxes, funeral expenses, and more.

Determine the right fiduciary

A lot of people are tempted to choose a family member as their fiduciary or executor. However, it's often best to leave this important task in the hands of a trusted estate planning attorney. Being an executor on a will or estate can be very time consuming. Also, it can be stressful if family conflicts come up. 

When you choose your attorney as your fiduciary, you can rely on an impartial third party to handle the task and thereby save family members from stress. 

Anticipate any discord in your family

Family discord can complicate the task of executing a will or estate plan. You know your family better than anyone, so you should consider possible discord before you plan.

Set things up to avoid conflicts among your beneficiaries and have potentially contentious tasks carried out by your fiduciary rather than a beneficiary if conflict is a likely possibility. 

Understand all your options

You need to find an estate attorney who can discuss with you the differences between key options like drafting a will vs. creating a revocable trust. There are numerous estate planning options that you need to understand to create the best estate plan for your family's needs.