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The Top Ten Legal Steps to Take Before You Die

No one likes to think about dying. It's not a particularly fun pastime to ruminate on our inevitable end. But it is because that end is inevitable that we need to plan for it. And perhaps we could alleviate some of our anxiety about dying if we take the necessary steps to protect our families and our assets.

Even if you don't think you have much right now to pass on to your surviving family or heirs, it never hurts to assess the assets you do have and make decisions on how you want them passed on. Better you make the decisions than the state, right? So, below are the ten essential legal steps to protecting your family and your assets before you die.

1. Hire an Estate Planning Attorney

Sure, you could do it all yourself, but how would you be sure that you're doing it right? An estate planning attorney knows all the tools of the trade and can best advise you on how to protect your assets and those you love by creating legally valid documents such as a will and trusts.

Estates, wills, and trust law is notoriously complex, and probate courts can misinterpret even seemingly simple turns of phrase. The best way to ensure that your wishes are fulfilled exactly is to have an experienced estate planning lawyer on your side.

2. Write a Will

A will is the cornerstone of most estate plans, and must meet certain statutory requirements to be enforceable. A last will and testament may allocate specific provisions to specific beneficiaries, as well as set up the parameters for distributing the rest of your assets that are not specifically named elsewhere in your will or estate plan.

If you die without a will, your estate is processed through a legal system called probate, under which courts and the state laws will decide where your assets go. Again, even if you don't think you have much to bequeath, in legalese, a will keeps your estate out of probate. So, you make the decisions rather than someone else.

3. Purchase Life Insurance

Whether you work outside the home or you stay at home, it is important to consider the income or services that you provide to your family. How will they replace that income after you die?

A good life insurance policy can take care of everything from simple funeral expenses to years of financial security for your family. If life insurance is not a benefit offered already by your employer, you should invest in a good policy as soon as possible.

4. Appoint a Guardian for Your Minor Children

This is among the most important things that you can do to protect your family in the event of your death. You will be secure in the knowledge that someone will care for your children, and that someone will be the person you choose to care for them -- not someone the state statute or a probate judge assigns for them.

5. Create Trusts

You could just pass on money or real estate to your children through your will. But then there may be serious tax implications and you run the risk of them squandering those assets or opening them up to creditors.

Instead, you can create trusts for specific purposes or with certain provisions. For example, you may hold money in a trust for your children until they reach a certain age. Trusts come in all kinds of shapes and sizes, and a qualified estate planning attorney can tell you which is right for you.

6. Create a Power of Attorney

A power of attorney designates someone to handle your business and financial affairs if you become incapacitated. In general, this person, or "agent", cannot override your express wishes like a written will. Instead, they make the choices you would if you were able.

7. Create a Living Will and Health Care Proxy

While a general power of attorney applies to financial decisions, these documents allow doctors to provide the medical care that you want provided in the event that you are unable to verbally direct them to provide that care. A living will provides specific directives as to what medical care you do or do not want in certain situations.

A health care proxy, on the other hand, appoints a specific person to make medical decisions on your behalf should you become incapacitated. Again, your health care proxy assigned under a "durable power of attorney" can't make decisions counter to your living will, but can address scenarios that the living will could not anticipate.

8. Consider Charitable Contributions

You may provide certain assets to the charity of your choice either in the form of a trust or in your will. If have a favorite charity that you want to support, or you'd like a tax deduction then you might consider making charitable contributions from your estate.

9. Make Sure Beneficiaries are Named on all Assets Which Pass Outside of the Estate

There are certain assets, like life insurance policies and certain retirement accounts such as some IRAs, will that will pass outside of your estate. Make sure the documents relating to those assets clearly state the intended beneficiaries so there is no confusion later.

10. Review Your Estate Plan Every Few Years

If you've taken all the preceding nine steps, great work! But you're not done yet. As your family and financial situations change, so should your estate plan.

For example, you might get married and wish to provide for your new spouse or you may have a child with disabilities whom you wish to provide more for financially than your other children. Similarly, your net worth may dramatically increase making it more important to use appropriate estate planning tools to minimize your estate tax and maximize the amount of money that goes to your beneficiaries.

Be sure your estate plan always reflects your current assets and testamentary intentions.

All ten steps will make sure that all your legal and financial matters are taken care of should anything happen to you, and will also provide security and predictability for your family and beneficiaries. You can also make sure that your estate plan is complete by consulting an estate planning lawyer near you.