An estate plan should provide for you and your loved one’s well-being in the event of your disability or death. More specifically, your estate plan should detail the distribution of your assets upon death, the medical care you wish to receive in the event of disability, the extent to which you can avoid probate, and how you will minimize estate tax.
An estate planning checklist can ensure your end of life desires are met. Therefore, we always recommend our clients use our free estate planning checklist to start their plan as soon as possible.
Establish Overarching Estate Planning Goals
Set definitive goals for your estate planning. What is most important to you? Do you want to continue giving to charities upon your passing? Are you seeking ways to avoid probate and reduce estate taxes? Do you want specific assets to go to certain loved ones? Your estate planning checklist should reflect all the goals you seek to achieve when drafting your estate plan.
Plan Your Asset Ownership
A key way to avoid probate is to plan your asset ownership. This includes executing legal documents that will help to avoid probate and allow the easy transfer of real estate, motor vehicles, and bank accounts to a co-owner, spouse, or other beneficiary. This usually includes property held as joint tenants in common with rights of survivorship, tenants by the entirety, or as community property.
You can plan your asset ownership by completing a net worth statement that includes a list of your assets and liabilities. You may also want to research what assets can be transferred through pay-on-death provisions, and identify the legal documents necessary to carry out those provisions.
Draft Your Estate Plan
Once you determine your estate planning goals, you will need to draft documents to ensure your assets are transferred according to your desires. Important estate planning documents may include:
- Last Will and Testament
- Revocable Living trust
- Special Needs Trust
- Advanced Healthcare Directive
- Durable Power of Attorney for Finances
Cover Your Debts with Insurance
Review your debts and insurance policy to ensure you provide your family with income protection. To ensure your debts are paid in the event of your death or disability, consider obtaining an auto, homeowners, disability, or life insurance policy.
Communicate Your Estate Plan Wishes
Once you finalize your estate plan, communicate your wishes to your loved ones. This will help avoid family conflicts and minimize any confusion or questions regarding your intentions. More specifically, it’s important that you Identify the assets that will not pass through a will to your loved ones.
Review Your Estate Plan Annually
It’s important to review your estate plan annually as changing laws may impact the transfer of your assets. Additionally, you should update your plan any time major life events occur. For example, you will probably need to change your estate plan following:
- the birth of a child or grandchild;
- divorce or marriage;
- the loss of a loved one; and
- dissolution of a family business.
Contact A People’s Choice for more information on creating the necessary documents that incorporate the goals of your estate planning checklist. Finally, do not delay in creating an estate plan. Doing so may subject your estate to probate and estate tax. Not to mention, it could cost your beneficiaries thousands of dollars of added expenses.