Plan early and thoroughly. Seems simple enough, but there are some tricks to being effective.
At the time you acquire your first asset, you need to be planning your estate. This includes everything from to whom it will be bequeathed all the way to how will they pay the taxes. Necessarily, estate planning is not a one time venture, but rather an evolution.
Every time an asset is added or disposed, a change in the estate plan must be made. As assets accumulate, seek counsel as to whether a trust is in order.
Dispensation of debt
The biggest mistake made when estate planning is failing to address the final expenses of the decedent. Whether they be hospital or long term care bills, overdue property taxes, funeral costs or consumer debt, expenses must be paid before an estate may be divided. Even when a will is written and recorded, until the bills are paid, no one inherits.
Part of every estate plan should be debt reduction. As you age, reduce debt as much as possible if you cannot eliminate it altogether. In the worst cases, entire estates must be seized and sold. This is easily avoided by taking one extra step in the estate planning.
Designating liquid or real assets totaling 120% of overall debt to be used for debt resolution is the simplest course. In this way, the executor of the estate will have the funds necessary to settle the estate expeditiously.
Reducing or eliminating final expenses are key to estate planning. Your will is insufficient to be certain your wishes are met. Contracts should be made prior to death. Choices include:
Prepaid burial preparations: Purchase casket and funeral services in advance.
Funeral insurance: Purchase a policy to cover the expenses family will incur if you cannot prepay.
Cremation: Significantly less expensive than burial, cremation should be paid in advance with an executed power of attorney for release of the remains.
Donation: Medical schools will accept any body for donation, but only if the decedent agrees to the donation.
Better safe than sorry.
Unless you are desire to subject your heirs to the will of your resident state, plan your estate and write your will today. Let your estate adviser or attorney make necessary changes each time you acquire real property or there is a 10% fluctuation of your liquidity. These simple steps will make the execution of your estate planning simple for your heirs.