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Estate Plan Checklist

Estate and financial planning are not cookie cutter exercises. They can be simplistic or very involved, depending on the circumstances of family, assets, residences, and similar facts. No matter the circumstances, something is better than nothing. One should avoid a situation of intestate succession (dying without a will and subject to state laws for inheritance as a default), if possible.

It is prudent to consult with experienced legal counsel and/or a trusted financial planner and adviser. Even if you prepare some or all of your estate-planning documents on your own or with the help of software or forms online, an experienced professional can serve a valuable function in conducting a review of your drafts to ensure they are appropriate to your circumstances and accomplish your desired aims. A great place to start your estate plan preparations or revisit your existing plan to ensure it is complete and appropriate for your circumstances, is with a checklist.

Key Objectives

  • Create a will. Wills name which parties and family members you want to inherit your property. They also designate a guardian to take care of minor children if you and your spouse die. A will can be handwritten in most jurisdictions, so long as certain requirements are met. The will can also be simple in most cases.
  • Consider creating a trust. Creating a living trust is a way to avoid the time and expense of probate court for your heirs who inherit your property that served to fund the trust. A trust can be a useful and beneficial tool if used and funded correctly.
  • Create health care/medical directives. Prepare a document of your desires for your health care in the event that you are unable to make your own decisions. You can create a health care declaration or living will and a health care power of attorney that gives a designated party the ability to make decisions in your stead for your care. You may be able to combine these documents into a single one in your jurisdiction, often in the form of an advance health care directive.
  • Create a financial power of attorney. A durable power of attorney for your finances allows you to place authority to handle your money and property into the hands of a trusted designee, if you should become incapacitated and not able to do it on your own. That agent or attorney-in-fact (not necessarily a lawyer) acts in your stead in financial matters.  Find out more about the differences between a will and power of attorney.
  • Protect your children’s assets and property. Name an adult to manage the assets, property, and funds that minor kids might inherit from your estate. It can be the same as the guardian you name for them in your will.
  • Name beneficiaries. Name a beneficiary for your bank accounts and retirement plans. It makes the accounts and plans automatically payable to your named beneficiary upon your death and eliminates probate for those assets. Stocks, bonds, and brokerage accounts can be treated this same way in most states.
  • Explore life insurance. If you have minor kids or own a residence, life insurance may be a prudent investment if you are in good health and can qualify for reasonable coverage inexpensively. It may be a good idea if you might owe large debts or estate taxes upon your death, as a way of funding the repayment of those liabilities.
  • Manage estate tax liability. The vast majority of estates do not owe federal estate taxes. It is only if your taxable estate is worth in excess of $5 million that you would owe them in 2011-12. Married persons can transfer up to $10 million without tax liability and real property that is left to your spouse or a charity that is tax-exempt is free from tax liability.
  • Provide for funeral expenses. Set up a payable-on-death account at your bank to cover these costs and deposit funds in the account to pay for your funeral and related expenses. Avoid a funeral prepayment plan because it can be unreliable.
  • Prepare your final arrangements. Make your funeral plans or plans for burial or cremation. Make your intentions for organ and body donation known.
  • Protect any businesses. If you are the sole owner of any business, create a succession plan. If you own it with others, create a buy-out agreement between owners.
  • Store important legal documents. Your executor or attorney-in-fact may need access to important legal documents if you are incapacitated or die. Your will, trusts, insurance policies, bank account, mutual fund, safe deposit box, retirement plans, IRAs, 401(k) accounts, debts, credit cards, mortgages, loans, taxes, Totten trusts, final preparations, funeral payment arrangement information, and deeds for real estate, stock, bond, and annuity certificates all need to be readily accessible and available, while being stored in a safe place free from water or fire damage.