Estate planning refers to the process of determining what happens to your assets after your death. While many people in California don’t want to think about their own mortality, most financial experts recommend having an estate plan. While the process may seem daunting, there are some simple steps to creating your own estate plan.
Your last will and testament
Estate planning involves filling out multiple documents, but your will is arguably the most important. Not only does this document contain what you want to do with your finances after you’re passing, but it also names the executor that is responsible for handling your estate. If you have any children, you can name a legal guardian for them in your will.
Power of attorney
One of the most common misconceptions about estate planning revolves around the idea that the term “power of attorney” covers medical and financial decisions. That is not the case. Your estate plan can include naming someone to handle your financial decisions after your passing, while a medical power of attorney refers to the person who will make medical decisions if you become incapacitated.
Many people have multiple life insurance policies with different beneficiaries named on each one. If you have multiple children, you may choose to name each of them on a different policy. Ensure that your estate plan includes updated copies of each beneficiary designation you have.
What to do with everything
Having all this information in a single location helps your executor expedite the process of settling your estate. Many people put their estate plan in a safe deposit box.
The greatest benefit of a proper estate plan is that it allows your executor and beneficiaries to access what you want to leave them without going through a lengthy probate process. The process can take months or even years for people who don’t have a complete estate plan on file.