Estate Planning Checklist

By January 22, 2017 Estate Planning
Woman filling out estate planning checklist

If you’re like most people, then you recognize the importance of estate planning, but don’t know where to start. Don’t fall into this trap. There is plenty that you can start doing right now to work on your estate plan…all without spending a dime on a lawyer or document preparer. Here’s an estate planning checklist to get you started.

Step 1: Get Organized

The first step on the estate planning checklist is simply to get organized and figure out what you own and what you owe. Clients often tell us that just getting organized was one of the best parts of the estate planning process. It’s a good feeling to finally get organized in your financial life and file away all those important documents that tucked away inside obscure desk drawers.

Here’s a list of the information you should gather:

  • Property titles (home, car, boat, etc.)
  • Investment, checking, and savings accounts
  • Retirement plans
  • Life your insurance policies
  • Marriage certificates or divorce decrees
  • Premarital agreement
  • Birth certificate
  • Previous years’ income tax returns (local, state, and federal)
  • Social Security Card (or at least your social security number)
  • Auto, life, health, and disability insurance policies (include premium amounts and due dates)
  • Employee benefit plan information (health, disability, retirement)
  • Location, deeds, and mortgage information for all real estate
  • Debts owed or due (personal loans, auto loans, credit cards, charge accounts, notes payable,
    notes receivable from others)
  • Business agreements relating to corporations, partnerships, or sole proprietorships (location,
    names, buy/sell arrangements)
  • Names and phone numbers of persons to be notified in the event of your incapacity or death

Imagine if someone had to try to track down all of the above information without you around? It would probably be a nightmare, which is exactly the reason why it’s so important to do this now. Your loved one’s are going to need this information to go through the probate process after your death, so save them the misery of piecing together your financial life after you’re gone.

Click here to download a free inventory worksheet that will help you gather and keep track of the information listed above.

Step 2: Think About Who You Trust

Who is going to step in to take over your finances if you become incapacitated from a stroke or accident? Who will raise your children if they are still minors when you pass away? Who will be in charge of making sure your estate is administered correctly and the people you want to get your stuff actually get it?

These questions boil down to one thing: trust. It’s very important that you take some time to decide who it is that you would trust to take care of things if you’re not around or unable to do them yourself. You can then give this person (or persons) the legal authority in your estate plan to take care of these issues. Otherwise, a judge might decide who that person will be, and it could be someone that you’d rather not be trusted with such important matters.

So, make a list of the people who you’d want to be in charge of the following things (it’s okay if it’s all the same person). If you’re married, your first choice would probably be your spouse. If so, think about a back up choice in case your spouse has already passed away or is also incapacitated. It happens more often than you’d think.

  • Manage your finances if you’re in the hospital and unable to take care of things like paying bills. This person would have full access to your bank accounts and other assets.
    Raise your children (if you have children under the age of 18). This person would also hold on your children’s inheritance until they reach age 18.
  • Administer your estate after you pass away. This person would make sure that your money, valuables, and other belongings go to the right people.
  • Make healthcare decisions on your behalf if you’re unconscious or otherwise can’t make such decisions. This person will decide things like whether or not you should have surgery, receive an organ transplant, or remain on life support.

These aren’t pleasant circumstances to think about, but it’s very important to take this step and make these hard decisions — especially if you have kids that might have to go live with someone else if something happens to both their parents.

Step 3: Make A Will

A Last Will and Testament is the one estate planning document that everyone should have, regardless of wealth or family situation. A Will allows you to state who should inherit your property, as well as who should serve as the guardians of your minor children if something should happen to you. You can also nominate one of the trusted people you identified in Step 2 to serve as executor of your estate.

Depending on the complexity of your estate and your budget, you can make a will yourself, use an online form, or hire an estate planning attorney.

Step 4: Consider a Living Trust

If you own real estate or have many potential heirs, your estate plan should probably include a living trust.  The primary benefit of a living trust is the ability for your estate to avoid probate, but there are other benefits, too. These include managing your children’s inheritance and reducing estate taxes. Your living trust will have to have a successor trustee to take over management of your property after your death. This should be one of the trusted people you identified in Step 2.

Step 5: Make a Financial Power of Attorney

A durable financial power of attorney appoints a trusted family member or friend to manage your finances if you become incapacitated or unable to handle your affairs. You should choose someone that you trust because he or she will have access to your bank accounts and other property without court supervision. All financial powers of attorney cease upon your death, so they are not a replacement for a Will or Living Trust.

Step 6: Make a Healthcare Power of Attorney

A health care power of attorney appoints a trusted family member or friend to make decisions regarding your health care in the event you are mentally or physically unable to make decisions for yourself. It also includes a declaration of your wishes for end-of-life care (a “living will”). You should discuss these wishes with your health care agent to make sure they understand your desires.

Step 7:  Protect Your Children’s Inheritance

If you have children, you should consider setting up your estate plan in a manner that protects their inheritance from frivolous spending or creditors. This can include restricting the conditions under which they’ll receive their inheritance or simply delaying their inheritance until they reach an age where you think they’ll be mature enough to handle it responsibly. You can accomplish this type of planning with a Will or a Living Trust.

Step 8: Update Beneficiary Designations

Bank accounts, retirements accounts, and life insurance policies allow you to designate a “pay on death” beneficiary. This can help you avoid probate and transfer the funds to your heirs automatically upon your death. Other types of assets that have similar features to a “pay on death” designation include vehicles, brokerage accounts, and stock certificates.

Step 9: Consider Life Insurance

Life insurance is an important part of every estate plan because it can provide much needed funds to your estate for paying off debts or helping a spouse who relies on your income. Life insurance is especially important if you have young children. You should also consider disability insurance, which will provide you with an income in case you become injured and cannot work.

Step 10: Make Final Arrangements

It’s generally a good idea to provide instructions for your burial or cremation, even if you don’t have strong feelings about it one way or the other, to prevent disagreements among family members after you’re gone. In Nevada, you can execute a “cremation affidavit” that gives a trusted friend or family member legal authority to take possession of your remains and carry out your last wishes.

Step 11: Plan Your Business Succession

If you’re self-employed or a small business owner, business succession planning is an absolutely critical part of your estate plan. As the very least, you should have a plan in place for winding down the business, collecting accounts receivable, and finishing and projects that are uncompleted. If you have partners, you’ll want to implement a buy back agreement that lets the surviving partner(s) buy-out the deceased partner’s share.

Step 11: Share Your Estate Plan and Store it Securely

This last step might seem kind of silly, but you’d be surprised how many people never tell anyone about their estate plan. This results in their chosen executor not even knowing they’ve been nominated for the job. Same goes for their children’s chosen guardian.

So, once you get your estate planning documents, take the logical next step and tell the people that will need to step up in the event that you die or become incapacitated. You might even consider giving them a copy of the estate plan so they have it and know what to expect.

Whatever you do, putting your estate planning documents in a safety deposit box at the bank is not recommended. As it turns out, the bank will not let anyone access that box without a court order. So, if you die or become incapacitated, your loved ones will have to suffer the cost and hassle of going to court to get your estate planning documents, which kind of defeats the point.

Conclusion

Now that you have a checklist to help get you started on your estate plan, don’t delay. Start taking action today using the steps outlined above. Our Reno estate planning attorney is always available if you still have questions or would like to get started on drafting your estate plan.