7 Steps to Estate Planning

Estate planning means making a plan in advance about what will happen to your assets after your death. The process of estate planning also includes broader health and financial directives, so that if you can no longer express your wishes, another person is able to make the best possible decisions on your behalf.

If you’re not sure where to start, here are seven steps to estate planning. And, don’t forget to check out HUECU’s new digital estate planning tool, offered via a partnership with Gentreo. This powerful new benefit from HUECU helps Credit Union members create a legally binding estate plan via easy-to-use tools and secure document storage.

1. List Your Assets

The first step to estate planning is to create an inventory of your valuable items. Consider technology (television, computer, iPad), cars and trucks, sports equipment, jewelry, antiques, collectibles, artwork and so on. In addition, you’ll also want to list financial assets including savings accounts, investment accounts, properties and life insurance policies. Finally, if you have any items of personal significance such as books, clothing or photos that you wish to go to a particular person or organization after your death, put those on the list as well.

2. List Your Debts

Along with understanding your financial assets, it’s essential to understand your liabilities. Write down credit card account information, home and auto loans, and any other loans or lines of credit which are currently open. You’ll want to list out account numbers and the contact information of lenders, all of which can be found on a recent credit card or loan statement. You may also wish to print these documents for easy reference in the future.

3. Make a Will

Now that you’re well versed in your assets and liabilities, it’s time to make a will. When writing a will, be prepared to name the executor of your will who is responsible for carrying out the wishes in the document; name beneficiaries for assets; and to sign your will with witnesses. An attorney can help you to create this important document, or you can choose an online estate planning service. The new estate planning tool from HUECU is one example of a digital option that includes everything you need to create and manage an estate plan—from document creation, to secure storage of key information, to easy updates of important documents as laws or personal circumstances change.

4. Develop a Medical Directive

Advance directives are a smart idea for all adults, but particularly important for older people who are in the process of estate planning. An advance directive, also known as a medical directive or living will, lays out your desires in case of a terminal illness, serious injury, or any other serious healthcare situation in which you are not able to make decisions or express your wishes. Along with an advance directives, also plan to appoint a trusted family member or friend as your healthcare proxy, meaning they can make healthcare decisions on your behalf, in line with your medical directive.

5. Evaluate Your Life Insurance

Estate planning is an excellent opportunity to review your current life insurance policy and see if it needs an update. The right life insurance policy is critical if you wish to continue supporting any dependents or family members after you’re gone. It can also help family members to cover funeral expenses, settle estate taxes, and pay off any other end-of-life costs which might arise.

6. Consider a Trust

Creating a trust is more expensive than making a will alone, but in some circumstances a trust can be useful to get more control over how assets are distributed and reduce the tax burden on heirs. Assets within a trust can usually get to beneficiaries more quickly than if they were to be distributed using the guidance specified in a will. Trusts can also be popular in complex inheritance situations involving the possibility of dispute amongst heirs.

7. Plan for Change

Estate planning is never a one-and-done situation. Plan to come back and reassess your estate plan regularly. Whenever a major life event occurs—such as a marriage, divorce or birth—use it as an opportunity to check and see how your estate plan needs to be updated. A good digital platform such as HUECU’s estate planning solution will allow you to make unlimited revisions whenever necessary.