The Essential Estate Planning Checklist

The Essential Estate Planning Checklist

This blog is the last and perhaps the most important installment in my four-part blog post series on estate planning. Don’t forget, estate planning isn’t about you, it’s about those you care about. Your ability to control the disposition of your assets from the grave is a powerful tool but it must be wielded for the benefit of your heirs and ostensibly minimize the power of the state.

ONE: If you want to create a solid estate plan the two most important things you can do are create a plan and hire an attorney to execute the plan.

  • Estate planning isn’t complicated, however, it does require planning and forethought.
  • The more time you put into planning, the better the result and the easier the process.
  • Having a plan in mind will help avoid costly pitfalls or potential family squabbles in the future.
  • Keep your plan simple and your estate plan will also be simple.

TWO: Define your goals and roles.

  • What do you want to happen with your assets when you aren’t around to make decisions about them?
  • To whom do you wish to distribute them and how would you like them distributed? For example, all at once or over time, etc. An age based distribution might be 20% at age 25, 50% at age 35 and the remainder at age 50.
  • Also, figure out ahead of time if there are specific gifts you wish to give to a particular person or charity? Make sure that you remember to specify them in your trust. If there are loved ones in your life that you want to make sure they are cared for, like an elderly parent or a special needs stepchild, make sure to remember them when getting the estate plan drawn up.
  • Figure out whom you wish to saddle with the responsibility of distributing your trust and whom will be the guardians of your children (if you have minor children). Choose these appointees carefully as they will be required to deal with a lot of work and need to make decisions on your behalf when you are no longer there. If there is no one that you want to be your executor, you can hire a professional executor whom you can pay with the proceeds of your estate. Also make sure to appoint backups for all these roles.

THREE: Gather and review your data

  • Gather all your financial data (bank, brokerage and retirement accounts)
  • Gather all titles to your assets and review all your beneficiary selections for retirement accounts.
  • Draw a picture of what your estate plan should look like keeping in mind the four components that are essential to an estate plan listed below.
    • Revocable Living Trust
    • Living Will
    • Power of Attorney for Health Care ( a.k.a. Advance Medical Directive)
    • Power of Attorney for Finances

I have outlined some figures to help you understand the questions that will be asked by your attorney when drafting your final estate plan documents.

Living Trust:

Living Trust

Living Will:

Living Will

Power of Attorney for Health Care (AKA Advance Medical Directive):

POA for Health Care

Power of Attorney for Finance:

POA for Finance

FIVE: Schedule your appointment with an attorney

  • If you don’t know a good attorney, ask a friend whom you trust for a referral.
  • Be extremely open with your attorney as to what you want. You are paying them to write a document that takes care of your loved ones.
  • Have the attorney draw up the documents and review the ENTIRE plan with the attorney to make sure it fits your goals and roles as you outlined above in step two.

SIX: Implement the plan, once the plan is in place, it must then be implemented. Please discuss this   step with your attorney to make sure you get it right.

  • Arrange to update accounts with your advisors, i.e. change your individual brokerage accounts into trust accounts & perhaps update your life insurance.
  • Transfer the deeds of your real estate properties to the trust.

SEVEN: Review your estate plan annually to make sure it does not need to be updated.

  • Changes in life are inevitable, divorce, death of a child, sale of a property do occur and your estate plan must stay current. Many attorneys will update your estate plan for a nominal fee when updates are necessary.

Thank you for reading my blogs on estate planning. Always consult an attorney when making estate planning decisions as I am not qualified to write an estate plan for anyone. I hope this checklist helps you plan to care for the ones you love.

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Risley Sams

Risley Sams

Risley Sams, CFP®, MBA, CPWA®, is the Founder and President of RHS Financial. He is responsible for the future of the firm and the strategic services that we deliver.