You’re ready to start making your will and getting your estate plans in order — but where do you even start? It’s one thing to gather up a list of all your assets and accounts. It’s quite another to try to figure out what should be done with them after you are gone.
One effective estate planning strategy involves thinking about your potential beneficiaries and the goals you have toward each.
Who are your beneficiaries?
A beneficiary is anyone who will eventually inherit something from your estate. You might include on your list:
- Your spouse: Your spouse will automatically inherit some of your estate, but there are ways to make sure that the transfer goes as smoothly as possible.
- Your children: You may need to consider additional plans if you have a minor child or an adult child with special needs.
- Any stepchildren: Stepchildren may not automatically inherit anything from your estate unless you make specific designations for them.
- Grandchildren: If you’re lucky enough to have grandchildren, you want a plan that changes as they reach adulthood.
- Other family members: Is there a special niece or nephew in your life you want to leave some assets? What about a younger sibling?
- Friends: Some friendships are for life. If you’ve been graced with that kind of relationship, there’s no reason not to acknowledge it in your will.
- Charities: Maybe you want to leave behind a lasting legacy that will benefit your favorite cause. If so, any charities you deem worthy should be on the list.
Once you have a list of the people or groups that matter to you, you can start to think about how to eliminate problems with the transfer of your wealth and minimize the amount of taxes that will be taken by the state or federal government.