If you died tomorrow, who would get your money and property?
Who would you want to care for your children?
What about your pets?
But creating an estate plan with an attorney can be expensive, sometimes costing thousands of dollars.
Thats a lot of money at a time when so many people are strapped for cash.
But your estate is simply everything you own.
What Is Probate and Why Do I Want to Avoid It?
Probate is the court-supervised process of distributing your assets when you die.
Everything becomes part of the public record.
This process can often take over a year, though its a lot simpler if youhave a will.
Even if you have a will, your instructions can be contested.
Someone who dies without a will is said to die intestate.
Though probate isnt completely avoidable, some assets can be transferred outside of the probate process.
Thats typically preferable, due to the time and lack of privacy you get in probate.
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When you designate beneficiaries for your assets like your retirement plans and bank accounts, you avoid probate.
There are infinite ways things can go wrong in estate planning, and well outline a few of them.
But these are some steps that can help you get started.
Make your bank account payable upon death.
In some cases, you’re free to do this online.
you’re free to also change the beneficiary at any time by filling out another form.
When you die, the beneficiary automatically becomes the owner of your account.
To claim the money, theyll only need to provide identification and a certified copy of your death certificate.
2. Review your beneficiaries for your retirement accounts and life insurance policy.
If you have multiple retirement plans and insurance policies, it can be easy to lose track of them.
Set a date to review those designations at least once a year.
If the beneficiary you named has died, the account will likely wind up in probate.
Create an advance directive.
Most states will require two witnesses to be legally binding.
Anyone who is likely to be involved in your health care should have a copy.
Write a last will and testament online.
A number of websites let you create a last will and testament online for $100 or less.
it’s crucial that you verify that your plan for their guardianship is airtight.
Talk to your family members about your final arrangements.
Thats why its essential to talk to your family about your wishes, no matter how morbid it seems.
Talking through your wishes is essential.
If your family is grieving your unexpected death, they arent in a great position to make decisions.
They may be vulnerable to being upsold on certain funeral costs, even if thats not what youd want.
For example, a traditional funeral and burial can cost upward of $10,000.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
She writes the Dear Penny personal finance advice column.
Send your tricky money questions to[email protected].
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
