An estate plan details how you want your assets to be distributed among beneficiaries after your death. It also involves appointing a trustworthy person who can make financial and medical decisions on your behalf if you cannot do so. Having an estate plan in place is important for the people you leave behind.
After settling all obligations, estate taxes are collected in Washington State. They are based on the value of the deceased’s assets. Therefore, you have to arrange for the payment of taxes on your property after your death. The amount of taxes due depends on your level of wealth. By planning in advance, you can ensure that your heirs will not have to pay these taxes themselves and that your assets are distributed according to your wishes.
Follow these steps to create your estate plan
The steps outlined below will help you develop an estate plan that will preserve and protect your assets.
- Make an inventory of all your assets and determine their respective valuations. Your list should include:
- Real estate
- Bank accounts and annuities
- Retirement plans
- Life insurance
- Investment accounts
- Decide who will be your beneficiary. These individuals (often your spouse and children) will be the ones who benefit from your estate plan. Also, designate who you would leave your belongings to in the unlikely event that your chosen beneficiary has passed on before you.
- Execute your plan, which involves signing the papers, securely storing them and informing your beneficiary and personal representative that this has been done.
- Update your plan when necessary. It is important to keep your estate plan up-to-date, especially if you create it when you’re young or if a major life event occurs, such as a divorce or the birth of a child.
When you are ready to create your estate plan don’t try to do it alone. Seek guidance to help you work through all of these important steps.
