With the arrival of a new year, comes the new year’s resolutions. Are you going to eat better, exercise more, travel, change your lifestyle, or achieve other important goals? What about estate planning? Is this the year you put your affairs in order?
One of the biggest hurdles to starting an estate plan is knowing what needs to be addressed. The entire concept of estate planning can be unclear. What are the questions you need to take into consideration? Since everyone’s lives are different, estate plans can vary greatly.
There are some common issues that need to be discussed in each case. Below is a simple Estate Planning Checklist designed to help guide you through the first steps. Whether you’re brand new to the idea of estate planning or revisiting decisions made years ago, this is a great way to make sure you’ve covered the essentials.
Estate Planning Beginner’s Checklist
- Make a Will – A Will serves as a blueprint for how assets are to be distributed at your passing. The Will can distribute specific assets, such as a cabin, to one or more of the children. It can also distribute assets in shares or percentages and under specific terms and conditions, including a trust. Your Will also names the executor who will settle your affairs.
- Set up a Financial Power of Attorney – A Financial Power of Attorney names a person or persons to make decisions for you when you are unable to act for yourself. You may name your spouse first, but who goes next? If you have more than one child, you can pick one over the other or use an either/or arrangement.
- Appoint a Healthcare Agent – A Healthcare Power of Attorney (also called a medical directive) allows someone to make medical decisions on your behalf if you’re incapacitated. Once again, you can choose a single individual or multiple individuals to act together or independently.
- Create a Living Will – This document outlines your wishes regarding end-of-life care, so your family isn’t left to guess or make painful decisions in a moment of crisis. It applies when you are incapacitated and terminally ill or permanently unconscious such as in a coma or vegetative state.
- Review Your Beneficiaries – Much of your savings will pass through documents other than your Will. Retirement accounts such as IRAs, along with annuities and life insurance policies have beneficiary designations. These terms override the provisions of the Will, and they may or may not mirror your Will. Therefore, they must be reviewed to make sure they are consistent with your current wishes.
- Make a List of Your Assets – Sometimes called a Letter of Instruction, this list includes your current assets, important contacts (such as your lawyer or financial advisors), and other information someone will need to help you. You can also make a list of personal property to be distributed after you pass. This could cut down on conflicts over sentimental or important items.
- Make a list of your Usernames and Passwords – Unfortunately, much of our financial lives are located on-line with separate sites for investments, bank accounts, and the scores of services you use, including Amazon, Google, and Apple. These are all driven by usernames and passwords. You need to tell your trusted Agent or Executor where this list is located.
- Think About Long-Term Care – One of the frequently asked questions is whether you should transfer your home or other assets to a child or a trust to protect them from nursing home costs. Asset protection is a part of estate planning. Not everyone engages in this planning, but if sheltering the value of your home or other savings interests you, you need to consider whether an Asset Protection Trust or similar planning will work for you.
- Are You in a Second Marriage? – These estate plans are a bit more challenging to create; often we are planning for two sets of children. In the “Brady Bunch” plan, children from a prior relationship may need to be addressed separately to ensure everyone receives their intended inheritance.
- Talk to an Attorney – Estate planning is not one-size-fits-all. An experienced attorney can help you create a customized plan based on your goals, your assets, and your family.
The Bottom Line: Every situation is different. If you’re unsure where to begin, our Help Me Decide Tool is a great starting point. Answer a few quick questions, and we will help you understand what kind of planning may be right for you.
You can also attend one of our Open Door Sessions for a free, no-pressure gathering to ask questions, learn about your options, and see if we’re a good fit to guide your next steps.
When you are protecting what you have spent a lifetime building, it’s important to get the estate plan right. And you don’t have to do it alone.