When you die, the path forward may not always be clear or obvious to the ones you’ve left. Death can be a lot of work. You can ease the process for your loved ones by sharing your wishes with them and setting up an estate plan before you go.
Stage 1: Funeral Arrangements
You can work with a funeral home in advance of your death to make burial or cremation arrangements. Note that legally, your next of kin will be making these decisions on his or her own if you have not appointed a representative or set a plan in place yourself. Paying for funeral arrangements can be expensive and sometimes complicated if estate funds are not readily available. Having a trust in place will ensure your heirs can readily access funds to pay for your funeral or celebration of life arrangements.
Stage 2: Probate
Probate enables a representative to take action on behalf of the deceased person’s estate. It can be a long and sometimes stressful procedure, particularly if real estate is involved. Using estate planning techniques, you can help your heirs avoid or simplify the probate process.
Stage 3: The Personal Representative
The personal representative named in a will be responsible for breaking down all the nitty gritty aspects of your life. This means giving away or selling your belongings, cancelling all your subscriptions, turning off the water and heat in your home, selling your house, paying your final bills and creditors, filing your income or estate tax return, and making distributions to your heirs.
Stage 4: Distributions
Once assets have been gathered and creditors have been paid, the personal representative has the authority to make distributions to your heirs. You can optimize their inheritance using estate planning tax minimization techniques.
Handling all of these tasks can be difficult for a grieving family member. It’s best to plan in advance to minimize the hassle for your loved ones. With a properly drafted estate plan, much of the guess work and court involvement can be removed from the equation.
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