This article originally appeared at U.S. News and World Report Money.
Estate planning is a pretty difficult topic to think about because it requires you to think about a world without you in it. No one likes to reflect on their own demise, which is why many people simply put estate planning off for another day and only get around to it when the chips are down.
It will cross your mind once in a while but because it’s a topic that’s not enjoyable to think about, you’ll put it off for another day with perhaps just a twinge of guilt.
Like so many things in life, however, taking care of your estate planning now is the right step, even if you don’t have any dependents. It’s a relief off of your shoulders and it leaves plans in place if the unthinkable were to happen to you.
These four items cover the needs of most people. If you have a significant net worth, you should consider talking to a lawyer for specific planning advice for your estate, but for most people, these four steps should take care of most of your estate planning needs.
Everyone should have a master information document. A master information document is simply a collection of the information a person would need to properly close out your accounts and obtain any and all account balances that you might have. This is an invaluable tool for whoever it is that is responsible for cleaning up your estate after you pass away.
It’s easy to prepare one. All you need is a printed document stored in a safe place that people will check when you pass away, such as a safe deposit box. That document should include account information for every account you have open, a complete list of every benefit anyone is entitled to upon your passing, a complete list of all debts and all assets, a detailed description of how to handle any business assets you may have, and a copy of your will, your living trust, and any other documents pertaining to your estate.
Everyone with dependents should have a term life insurance policy. If you’re leaving behind anyone who relies on your income in order to keep food on the table, clothes on their back, and a roof over their head, you need to have a life insurance policy in place.
Insurance salespeople will try to get you to buy lots of different types of policies, but all you really need is a term policy with a term long enough so that anyone reliant on you (such as children) will be independent by the end of the term. For most parents, that means a ten year or twenty year term policy. How much? It should provide at least a few years of your salary.
Everyone who wants to make sure who gets personal items when they pass should have a will. If you have any personal items that you really want handed to a specific person if you were to pass away, you need a will in place that dictates the handling of such personal possessions. Otherwise, you’re relying on the court system and your family to simply figure it out and that puts a burden on all of them.
Just make a list of any items that you want given to specific people, then have the rest of your estate liquidated and split among all descendants or given to a charity, as per your desires. This can easily be transformed into a legal will using a service like LegalZoom.com.
Everyone with dependent children should also have a will that includes guardianship information. Who should care for your children if you were to suddenly pass away? It can be a very difficult decision, and it should be one that you discuss with the people you are considering. Most important, such wishes should be set down in a legal will.
Estate planning is an intimidating thing, but many of the steps that people need to take are very simple. They also add to your personal peace once you’ve taken care of them. If you don’t have these things in place, consider spending some time before the end of the year to make sure those matters are in hand.