UAEX Money
Estate Planning: A Step-by-Step Guide
Simplify the complex process of managing your assets and securing your future!
What is Estate Planning?
Estate planning ensures your assets are managed and distributed according to your wishes after you pass away. It’s not just about preparing for death; it can also help you stay financially stable throughout your lifetime.
Estate planning involves making decisions about how your assets (what you own) will be managed and/or distributed after your death or in the event you become incapacitated. For example, it allows you to control who inherits your property.
Knowing your affairs are in order can also give you peace of mind that you’ve taken steps to prevent family disputes over your assets. Beyond assets, estate planning can also include planning for your healthcare and choosing a guardian for your beloved pet.
Getting Started with Your Estate Plan
1. Take Inventory of Your Assets
Begin by listing all your titled and non-titled property. Titled property may include
real estate, stocks and bonds, vehicles, and/or machinery. Non-title property may
include your cat or personal items like jewelry, photographs, and books.
You can then calculate your net worth statement. To do this, find the current market value of your assets then subtract your debts. Ideally, you want this number to be positive. For example, the current value of your home — not what you paid for it twenty years ago — minus your mortgage.
2. Define Your Goals
Now that you’ve created an asset inventory, think about your goals. 
Are you focused on minimizing taxes? Do you want to travel more in retirement? Do
you want your family’s farm to continue for future generations?
These goals are personal to you and will guide you when making decisions. Be sure to weigh the advantages and disadvantages of each goal as you plan.
3. Choose Your Estate Planning Tools
Based on your goals and asset inventory, decide whether you need a will, a trust, power of attorney, or other tools like beneficiary designations for bank and retirement accounts such as a 401(k). Research information and legal requirements for these documents. For example, in Arkansas, hand-written wills are acceptable and valid. Afterward, start preparing these documents and store them in a safe, secure place such as a fireproof lockbox.
4. Get Advice from a Finance, Legal, or Insurance Professionals if Needed
You may decide to seek advice from an attorney, financial planner, or other financial professional. They can guide you through the process and help you with specific financial or legal matters. However, be sure to check their credentials and carefully evaluate when selecting a financial professional.
5. Communicate Your Plan
Once your estate plan is set, let those involved know what you would like them to do when the time comes. Make sure your beneficiaries, trustee, executor, or legal representative can access necessary information and know where documents are located. Account numbers and other financial information should be kept in a secure location.
