No one wants to think about dying or what will happen to their things after they’ve gone. However, life can be unpredictable, and having an estate plan in place can help make sure your wishes are respected after you pass. As you age, it becomes more and more relevant to have solid estate plans and make sure they’re up to date. This Iowa estate planning checklist will help you do that.
Estate plans can also help determine who can step in for you if you become ill or otherwise incapacitated. They act as contingency plans so your estate isn’t left in limbo without your presence. If you need help with estate planning in the Hawkeye State, consider working with an attorney from Letsch Law Firm.
1: Consider Medical and Financial Agents
When you become incapacitated, it’s helpful to name people you trust to make decisions on your behalf. You can give someone medical power of attorney to make decisions based on your medical care, and name financial agents to help manage your financial interests.
Oftentimes, you can also create documents that detail your wishes for this situation. It might be wise to hire an estate planning lawyer to look over these documents and check that they’re legally sound.
2: Inventory the Assets You Want to Include
Before even deciding what type of estate plan works for you, you should determine which assets are most important. This includes your physical assets such as real estate, cars, and prized possessions; it also includes less tangible assets like retirement accounts and investments.
Inheritance is a big topic in America, with roughly $124 trillion in assets expected to be inherited by Americans by 2048. To help protect your assets and interests, properly inventorying them is essential.
3: Consider Family Needs
The needs of your loved ones will likely guide your next steps. Who relies on you for financial support? Who else utilizes your house or car? Do you have any heirs with special needs or considerations?
Answering these questions will help guide you toward who should be named as beneficiaries of your estate. You might also want to set specific guidelines for use or make sure that a certain family member gets a specific item.
4: Decide the Right Estate Plan for You
Wills are a common type of estate plan, but they’re not the only option. The more valuable your estate, the more thoroughly you’ll want to plan for its continuance after you pass. You can also combine multiple estate planning documents to form a more personalized plan.
In Iowa, the average home value is $227,000. If you have a more valuable home in an area like Cedar Rapids, it will be even more important to protect it. Documents like living trusts, irrevocable trusts, naming insurance beneficiaries, and more can be an important part of your estate plan. Consult a lawyer to find out what documents would support the plan you have for your estate.
5: Create, Distribute, and Secure Documents
Once you have your plans, you should formalize them through legal documentation. This is especially important, but often forgotten: 68% of Americans don’t have a will. Whether you choose wills, trusts, or something else, you want to confirm the documents are legally sound.
The simplest way to do this is to work with an attorney. They can advise you on legal requirements for your plans, and help you create sturdy, sound documents. Having well-built estate plans helps mitigate the disputes that might arise after you pass, and can even bypass the lengthy probate process.
After finalizing your documents, make multiple copies. Keep at least one in a secure location, and give other copies to people you trust, like your attorney, the executor of your will, or other trusted family members. It can also be a good idea to keep a digital copy in a secure location.
6: Keep Your Plans Updated and Safe
Sometimes life changes, and your plans need to change too. Reasons to update estate plans include:
- A significant change in the value of your estate
- New family members are born or reach the age of adulthood
- Your relationships with people named in your plans change
- You gain new property, accounts, or other assets not covered in the initial plans
After updating your plans, make sure that everyone who had the original copy now has an updated version, and give a copy to new people if you want them to have one.
FAQs About Estate Planning Checklist
What Is the Most Common Inheritance Mistake?
The most common inheritance mistake is probably forgetting to consider the effects that inheritance taxes could have on your property. Properly accounting for this helps protect the inheritance you want to give to others. Additionally, many people can make rushed, emotional decisions in the inheritance process that damage their financial future.
How Much Does an Estate Planning Attorney Cost?
The cost of an estate planning attorney will vary depending on the details of your case. They will consider their fee structure, how complex your estate is, and what kind of plans and management you want to pursue. You can consult an Iowa estate planning attorney to get an estimate for how much it might cost you.
What Is the 5 by 5 Rule in Estate Planning?
The 5 by 5 rule is a common feature of trusts. It allows the beneficiary of the trust to withdraw up to $5,000 or 5% of the trust’s value annually, whichever is greater. This helps mitigate tax consequences and protect the value of the trust, so many people choose to make it part of their trust documents.
Who Should I Not Name as a Beneficiary?
You should not name beneficiaries whom you wouldn’t trust to properly manage and use your estate. In general, only name beneficiaries that you want to inherit property from you, and whom you trust to be responsible with that inheritance. A lawyer can help you determine who to name as a beneficiary based on your and your family’s goals.
Hire an Estate Planning Lawyer Today
Even with this checklist, estate planning can be complex, and it might be difficult for you to figure out which option is right for you. By working with a lawyer, you can feel confident that you’re meeting the legal requirements and understand important rules, caveats, and options.
Contact Letsch Law Firm now to get help from an experienced attorney you can trust to keep your interests front and center.
