Estate Planning: Tips & Factors to Consider

The American Bar Association describes estate planning as “the transfer of property at death as well as a variety of other personal matters and may or may not involve tax planning. The core document most often associated with this process is your will.”

Why is estate planning important? The primary reason is that your assets are distributed according to your wishes. Being proactive about this planning can save you and your family time and unnecessary stress in the future.

While estate planning may seem complicated (and it can be), there are ways to make the process easier. As a life plan community in Pleasant Hill, Tennessee, Uplands Village helps individuals navigate planning for the future. Our team is sharing tips and factors to help ease your estate planning experience.

Take an Inventory of Your Assets

Even if you think you don’t have many assets, you may be surprised once you start taking note of them. In this situation, assets are typically divided into two categories – tangible and intangible. Nerd Wallet divides these categories as the following:

Tangible assets include items such as:

  • Homes, land, or other real estate
  • Vehicles – cars, motorcycles, boats, etc.
  • Collectibles such as coins, art, antiques, or trading cards
  • Other personal possessions

Intangible assets may include:

  • Checking and savings accounts or certificates of deposit
  • Stocks, bonds, and mutual funds
  • Life insurance policies
  • Retirement plans – workplace 401(k) or individual retirement account
  • Health savings accounts
  • Ownership in a business

Once you have identified all your tangible and intangible assets, it is important to estimate their value. For most of your intangible assets, this estimation should be simple. However, getting an updated appraisal of your home or an outside valuation of an art collection could be necessary to help you accurately estimate the value of your estate.

Prepare Your Documents

A complete estate plan defines your wishes for how your assets will be distributed and to whom. Because of this, several legalities go into the process. Therefore, in order to reduce the risk of your assets going to probate and a judge making decisions regarding your assets, you want to prepare all the necessary documents ahead of time.

A Living Will defines “your wishes for medical care if you become unable to make those decisions yourself. You can also give a trusted person medical power of attorney for your health care, giving that person the authority to make decisions if you can’t. These two documents are sometimes combined into one, known as an advance health care directive (Nerd Wallet).”

Durable financial power of attorney “gives an individual or organization the ability to make financial decisions in your name and on your behalf if you are unable to do so yourself (MetLife).”

A Last Will and Testament “is a legal document that includes your wishes for your possessions and dependents following your death. During the will planning process, you can name your beneficiaries, designate guardians for minor children, and identify an executor of your estate. This person will be responsible for carrying out your wishes as outlined in your will (MetLife).”

A trust is also an option but is not necessary for everyone. “With a revocable living trust, you can designate portions of your estate to go toward certain things while you’re alive. If you become ill or incapacitated, your selected trustee can take over. Upon your death, the trust assets transfer to your designated beneficiaries, bypassing probate (Nerd Wallet).”

Plan to Review and Reassess

Estate planning is not about getting everything in order once and being done with it. Depending on your situation, you may need to continually review your assets and their values and update documents as necessary. In addition, revisit your estate plan any time circumstances change, including a birth, death, marriage, or divorce. Even if your situation is the same, it is still important to reassess your plan periodically in case any laws have changed. This ensures that your estate plan remains up-to-date and always reflects your wishes.

If you have additional questions or concerns about estate planning, please seek professional help and advice for your specific situation. In addition, we invite you to visit our website for more resources regarding senior living or to learn more about our life plan community in Pleasant Hill, Tennessee.