estate planning checklist

The term “estate planning” can send shivers up anyone’s spine. First, people generally don’t like to think about passing away or a world without them. But, more so, it’s the thought of poring over paperwork and legal documents. It doesn’t sound like a sensational weekend to remember.

However, estate planning is one of the most considerate actions you can take on behalf of your loved ones. It helps ensure your final wishes are enacted, your assets are distributed as you intended, and your children or pets are placed in the care of those you trust.

To many, estate planning is seen as only for the wealthy. But that assumption is far from the truth. Everyone can benefit, and the process is much easier today thanks to technology. The following guide will walk you through the necessary components to ensure those you love are taken care of after your passing.

Last Will

A will is a legal document that outlines who will inherit your assets, such as property, possessions, and financial accounts. If you have dependent children under your care, you’ll also be able to assign a guardian to care for them in your absence. The same condition applies to any pets you may choose to list.

When creating a will, you will also choose an executor of your estate. This is an individual responsible for carrying out the details of your will. It’s advisable to select a person you trust, who is accountable, and isn’t facing financial difficulties.

Review of Beneficiaries

A beneficiary is an individual (or individuals) you designate to have access to your financial accounts should you pass away. The benefit for a beneficiary is they will gain immediate access and avoid lengthy legal proceedings, such as probate.

Typically, people will list their spouse or children as their beneficiaries. In some circumstances, you can designate a charity or organization.

A lot can happen in a year, so it’s wise to review your beneficiaries annually. For example, you might become married or divorced, have children, welcome new grandchildren, or a grown child might become married. All of these could be reasons to update your beneficiaries.

Living Trust

Similar to a will, a living trust allows the transfer of property and other assets without lengthy probate court proceedings. The main difference is the assets are stored in a separate entity called a trust.

You can still control and reassign asset distributions while you’re alive. Upon your death, those set to inherit assets will do so immediately. Trusts are more common among complex estates or if they involve the sale of a business or various properties. However, anyone looking to avoid probate court proceedings can benefit from a living trust.

Living Will

While Last Will and Living Will might sound similar, they are quite different. Your Last Will details how your assets will be distributed after your passing. In contrast, your Living Will describes your wishes toward future medical care if you cannot communicate them yourself.

Two common scenarios where a Living Will comes into play:

• If you’re in an accident and are placed on life support. Your Living Will could provide directions to your family on whether they should continue to seek medical help on your behalf.

• If you’re incapacitated and can no longer make medical decisions for yourself. With a Living Will, your caregiver will know how you would like to proceed regarding specific treatments.

NOTE: A Living Will is a vital document for your loved ones. Without it, making decisions regarding extending your life through medical care can be devastating for your family. Your Living Will can eliminate their need to make those difficult decisions.

Power of Attorney

Should you become incapacitated and unable to make decisions for yourself, a Power of Attorney (POA) is crucial. This document allows you to designate an individual (or individuals) who can make decisions on your behalf. There are two common types of power of attorney:

• Financial: With a financial power of attorney, the person(s) you designate can access your financial accounts, pay your bills, and manage your money.

• Healthcare: Tying into your living will, a healthcare power of attorney allows a person to make medical decisions on your behalf. Generally, medical professionals will not speak with a caregiver unless they have a valid power of attorney.

If you’re healthy right now and able to manage your affairs, you can still create financial and healthcare POAs. There are “immediate” and “springing” powers of attorney. An immediate POA goes into effect instantly. Alternatively, a “springing” POA only becomes active once a doctor acknowledges and signs off that you cannot make decisions for yourself.

Letter of Intent

A letter of intent is not legally binding and is an informal document regularly included in estate plans. Most commonly, this piece will outline funeral arrangements and preferences. However, it can also list things like the distribution of possessions not itemized in a will.

For example, for simplicity, many people will leave all their belongings to their spouse or children. However, you might wish for your favorite fishing pole to go to your best friend.

List of Records

Lastly, it’s highly encouraged that you include a record of all your financial accounts, property, and possessions. Doing so will help prevent your grieving family from a years-long scavenger hunt as they try to track down everything you left behind.

Items you’ll want to detail include:

• Records of all financial and loan accounts, including financial institution names and addresses.
• Contact information for individuals listed in your estate plan, including beneficiaries, heirs, guardians of children or pets, and charities.
• Copies of all insurance policies.
• Titles of personal property (e.g., vehicles) and property deeds.
• A list of all your digital logins to financial accounts, necessary emails, etc.