Estate Planning Checklist and Tips to Follow

Estate planning can feel like a daunting task, but this checklist can help you get a handle on it

Estate Planning Checklist and Tips to Follow

Everyone needs an estate plan. While no single plan that will be fit for every individual, there are some guidelines that will help you tailor a plan to your individual needs and wishes. To help you get started, below is an estate planning checklist, along with some useful tips.

1. List all your assets and liabilities

Make a list of your assets, no matter how small they are. Begin with big-ticket items, like real estate, business assets, vehicles and nice jewelry, but remember to include less expensive things as well – think digital assets, furniture, appliances and books.

Do the same for your liabilities. Document what you owe so you can make arrangements to pay off debts without burdening your family with credit card, car and/or mortgage payments.

2. Name your beneficiaries

Designate beneficiaries on your bank accounts, insurance policies and retirement plans so that you can easily transfer these assets to your loved ones. Doing so allows your funds to skip probate – the process of proving a will’s validity and authenticity and administering a deceased person’s estate according to the terms of that will.

An estate planning lawyer can help you navigate your state’s laws, decide how to set aside assets for your beneficiaries and make sure you do not overlook about anything important. Even if you do not have a complicated estate situation, make sure to meet with this lawyer at least once so you can be sure your documents meet your state’s legal requirements.

4. Draft your will

A will is a very personal document but, in most cases, you should specify who will execute your will and handle guardianship of your children and/or pets, which assets will go to whom, and how any remaining debts will be managed.

5. Consider a living trust

A living trust enables you to retain control over your assets during your life while naming a beneficiary for the future. There are two types of living trust: revocable and irrevocable. Once your assets are set aside in a trust, it will be much easier to transfer property ownership. If you want to leave a specific property to your loved ones, you should create a living trust and transfer assets to the trust so that ownership can go directly to the intended person. Not everyone needs a trust, however, so you should consult your lawyer first about setting one up.

6. Create health care directives

Health care directives usually include creating a living will as well as deciding who holds power of attorney specifically for health care issues. A living will includes instructions for how medical treatment should be handled if you’re unable to communicate, while health care power of attorney gives someone the ability to make medical decisions on your behalf if you cannot make them for yourself and you have not left instructions. In some states, these documents are combined into one and called an advance health care directive.

While these are valuable for everyone, they are particularly important for those with serious health conditions. For instance, some people may prefer pain management treatment over life-extending treatment.

7. Arrange financial power of attorney

With a durable financial power of attorney (POA), you can give a trusted person authority to handle your finances and properties. The person who gives the authority is referred to as the principal, while the one who receives it is referred to as the agent or attorney-in-fact (but does not have to be an attorney). Depending on how it is worded, a POA can either become effective immediately or upon the occurrence of a future event, such as mental incapacity. The authority conferred by a POA always ends upon the principal’s death.

8. Make your end-of-life wishes

Decide what your wishes are when it comes to things such as organ donation, funeral services, and burial or cremation. Once you have decided, write them down, communicate them to your loved ones and check with your lawyer about your state’s regulations to make sure your end-of-life wishes will be honored.

9. Store your documents properly

Keep all your documents in one place so that your attorney-in-fact or executor (the person you choose to administer your property after your death) can access them when needed. These documents may include:

  • Will
  • Trusts
  • Real estate deeds
  • Insurance policies
  • Certificates for stocks, bonds and annuities
  • Information on retirement plans
  • Information on bank accounts, mutual funds and safe deposit boxes
  • Information on debts such as credit cards, mortgages and loans, utilities and unpaid taxes
  • Information on funeral prepayment plans and any final arrangements and instructions you have made

### 10. Sign up for life insurance

Life insurance is crucial if you want to leave a safety net for your loved ones, ensure debts get paid and cover funeral expenses. If you do not have a life insurance yet, find a policy soon to make sure you and your loved ones are protected.

Estate planning is not a fun thing to think about and do, but your loved ones will benefit from it. With an estate plan, you can rest assured that you will not leave your loved ones with financial burdens but only with trouble-free wealth. And while you are still living, make sure to update your estate plan as needed (such as when your situation changes or current laws change).