A successful estate planning strategy hinges on a variety of factors. Each person’s or family’s situation is different. Still, a number of the steps are similar and require knowledge and action in common and specific areas. This article focuses on two important areas of estate planning that nearly everyone will need to address at one point: proper legal documents and an understanding of assets.
An article in Money Talks News lists eight documents that are critical to comprehensive estate planning. The first document mentioned is a last will and testament, an important piece of paper that serves several functions. It typically names an executor of the estate and may cover the wishes of the deceased for funeral arrangements. Arguably its main goal is to carry out directions for the best interests for surviving children, pets, friends and loved ones. Other vital documents include beneficiary designations, a revocable living trust, durable power of attorney, a letter of intent and a list of important documents. It is important that the executor of the will knows where to find information on annuities, checking accounts, insurance policies, real estate deeds and investment papers.
Just as importantly, all assets and liabilities need to be listed in an accessible location. Schwab MoneyWise describes the steps of creating a net personal wealth statement. Some common assets include money in savings and checking accounts, value of real estate, business holdings, value of vehicles and value of personal property such as jewelry and artwork. A good record of net worth, which subtracts any liabilities such as real estate loans, helps organize finances and aids in estate planning.