1. Create a Will
If you die without a will, the court will decide what to do with assets, debts, and even your children. This is called dying intestate, and it leaves the distribution process up to the state law where you reside. To write a valid will, simply focus on stating exactly who you choose to inherit your property, and also write who you want as a guardian for your kids in case something happens to the other parent as well. If proper planning is not completed, your family will be stuck in probate court, which is time-consuming and expensive.
2. Consider a Trust
If you want to avoid the probate process entirely, consider setting up a revocable trust. If you hold your assets in this manner, you will essentially transfer ownership of your property to a trust that includes exact details on distribution when you die. Because the information is contained within one document, you are able to skip probate completely.
3. Set Up Life Insurance
Life insurance is a smart idea, especially if you have young kids, are a homeowner, or you will likely owe a large amount of estate tax after you die. You will need to make sure that you have adequate coverage for your family to meet all of their expenses when you're no longer there to help. Consider purchasing term life insurance, which can be an affordable option as you pay a fixed premium for the entire life of the term.