Thinking about death isn't fun, especially if it's your own. However, creating a plan to divide your estate after you're gone relieves the burden from your family members, as well as ensures that all of your loved ones understand your wishes. However, you need to do more than write a will when you're creating a plan for your estate. You need to take numerous things into consideration -- at the very least you need to do these four things.
Take an Inventory of Your Belongings
Before you can even begin to create an estate plan, you need to know exactly what you own. Compile an inventory by going through all of your belongings, both inside and outside of your home, making a list of everything that you own that's worth at least $100. Don't forget to list things, such as:
- Computer equipment
- Photography equipment
- Art and/or collectibles
Take an Inventory of Your Non-Physical Assets
After you've created an inventory of your physical assets, you need to take inventory of your non-physical assets, including:
- 410k plans
- Life insurance policies
- Bank accounts
- Brokerage accounts
Also, while you're taking an inventory of your non-physical assets, take note of any other insurance policies that you have, such as auto, home, long-term care, disability, and health; and make sure all of your beneficiaries are listed correctly.
Write a Will
Your will tells all of your loved ones exactly how you'd like your assets to be distributed in the event of your death. If you're creating a standard will, you can either hire a lawyer to draft it for you or write it yourself. If you opt to write your own will, you will need to have it signed, dated, and notarized in front of two witnesses.
While US law doesn't require anyone to write a will, practicing Muslims who want their estates distributed according to Islamic Sharia law should enlist the help of an Islamic attorney. Attorneys who specialize in Islamic law understand the importance of dividing your estate following the rules of the Quran.
Establish TOD Designations
Unless you officially establish a transfer-on-death request with your bank, there's a good chance that any bank accounts, individual brokerage accounts, and CD accounts will have to go through probate before the assets are distributed. If you set up a transfer-on-death request for your accounts, your loved one simply needs to show the bank your death certificate to have any funds in your accounts transferred.
Estate planning isn't hard, but it does take time. The good thing is that once you've finished planning your estate, you don't have to worry about your family becoming overwhelmed with unnecessary burdens after your death.