Smart Steps for Small Estates

Even if you are just starting to build your estate and do not need complex estate planning, there are several steps you should consider taking immediately in order to protect your family and to reduce expenses in the event of your death.

 1. Draft a Will. A formal legal document directing the settlement of your estate is crucial to the success of your estate plan. Qualified experienced legal assistance and proper witnessing should always be sought. Only through a will can you designate your own executor, guardians for minor children, and other fiduciaries, rather than relying on the probate court to appoint them for you.

A living trust funded with specific assets can allow those assets to pass to your heirs outside of probate. It may be a smart step to take in addition to drawing up your will.

2. Title Assets Properly. Unless you live in a community property state, where disposition of assets falls under community property laws, the simplest and least expensive estate planning technique for married couples is to take title to assets as joint tenants. This arrangement excludes assets from probate and may eventually save legal costs. Your personal residence is an example of property that may be jointly owned and can avoid probate at the death of the first joint tenant. However, bear in mind that asset ownership arrangements may need to change if your estate grows substantially.

3. Purchase Life Insurance. This relatively inexpensive step can help ensure that a surviving spouse will meet key financial obligations without delay. It is especially important when one spouse provides sole support and for couples with children.

4. Plan for Incapacity. First, analyze your disability insurance coverage. Second, consider granting a durable power of attorney over medical and financial matters to your spouse or a close relative. This enables the individual with power of attorney to make decisions on your behalf should you be mentally or physically unable to do so.

There are many things you can do to start the planning of your estate, no matter what size it is. However, it is important to consult with a qualified legal professional to help  ensure you take the right measures to best meet your objectives.


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