Your Complete Estate Planning Checklist

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Please note the publish date of this blog. Financial information, market conditions, and other data mentioned in this post may no longer be accurate or relevant.

No one can predict the future. Even so, one thing remains true: If we leave unanswered questions about how to settle our affairs, life for our loved ones could get more complicated when we are gone. This is why developing an estate plan is an essential element of your financial portrait that should not wait. 

Understanding Estate Planning

You may ask, “What exactly is an estate plan?” For starters, an estate plan is a collection of formal documents that outline how your money and other assets are to be distributed. These documents make it more manageable for loved ones to navigate your affairs during a time of immense grief. 

On top of that, an estate plan can:

  • Identify a trusted individual to make decisions should you become incapacitated. 
  • Specify who will care for your minor children if you are unable to do so. 
  • Alleviate estate taxes and other transfer taxes. 
  • Aid in the planning and management of probate. 

Another question you may ask is, “Who needs an estate plan?

You do.

If you are young and single, your estate plan may only require a few documents, such as a will, beneficiary designations, and medical and financial powers of attorney. If you have minor children, you’ll need to establish a will in order to name a guardian. Perhaps you find yourself with substantial wealth; trusts may play a critical role in your estate plan to dictate how your assets are ultimately taxed, managed, and distributed. 

Maybe you’re wondering, “What if I already have an estate plan?” Awesome! You are ahead of the pack! Moving forward, review your plan regularly for revisions as your life evolves so it reflects your current wishes. 

If you find yourself without an estate plan, or want to ensure your current plan is sufficient, look no further. Below, we have outlined five items that should be on everyone’s estate planning checklist. 

1. Review Asset Titling and Beneficiary Designations

These are two of the easiest ways to outline who gets what. By tilting assets properly and naming beneficiaries, heirs get faster access to your assets while minimizing the probate process. It’s important to know that asset titling and beneficiary designations typically override established wills and trusts. 

Asset Titling

If you title assets jointly with rights of survivorship (JTWROS), these assets will pass outside of probate to the joint owner. When titling assets, be aware the surviving owner is not required by law to dispose of those assets according to instructions left in a will or trust. Be sure to review all titling to ensure it accurately reflects what you hope to accomplish with your estate plan.

Naming Beneficiaries

For assets like retirement accounts and insurance policies, you are asked to name your beneficiaries. Those named as beneficiaries will ultimately inherit the assets. For non-retirement accounts, it is unlikely you will be asked to designate a beneficiary as these assets will pass according to your will’s distribution provisions. If you have a revocable living trust (more on this later!), your attorney will likely ask you to re-title non-retirement accounts into the name of the revocable living trust, or at the very least, name your trust as a beneficiary. 

2. Establish Powers of Attorney

If something happens to you, someone else may need to take over. A helpful way to have someone else make decisions for you is by naming a power of attorney.

There are a variety of options for powers of attorney (POAs) that can authorize an individual to step into your shoes and act on your behalf. A POA can be written to take effect now or to activate only if you are no longer able to make your own decisions. A durable POA takes effect once it is signed. You should know that all POAs expire at death. 

Financial POAs can be made for your bank or brokerage accounts. Medical POAs name a trusted individual to make medical choices for you. Medical Directives, while not technically POAs, let you state what type of medical treatment you do (or do not) wish to receive if you’re too ill to direct your own care. 

Having read this, you may be wondering, “What should I do now?” Start by asking your estate planning attorney to review your existing POAs or create new ones pertinent to your situation. 

A note for unmarried partners: If one partner is hospitalized and needs someone to make medical decisions, if not a legal spouse, the other partner may not be able to step in even though they may be the most qualified. Putting in place a medical POA will ensure you avoid this situation.

3. Consider Life Insurance

For many of us, myself included, life insurance is a critical element of our estate plan. Having a life insurance policy in place can help provide financial security for those most dependent on you. There are a host of good reasons to consider life insurance:

  • Income replacement. In the event of your death, life insurance proceeds can be a vital funding source to replace your income, pay off the mortgage, or fund your children’s education.
  • Terminal illness. Should you become terminally ill, some policies give you access to a percentage of your benefit during your lifetime. These accelerated insurance benefits can be used to alleviate unexpected expenses or medical costs at a critical family moment. 
  • Estate taxes. If owing estate taxes becomes likely, life insurance funds can provide liquidity to cover these costs. 
  • You own a business. A life insurance policy can help pay off existing business loans, provide financial stability after the sudden death of a critical employee, or secure necessary cash to fund a buyout by a surviving owner. 

Maybe you’re thinking, “None of these situations apply to me. Do I really need life insurance?” In short, not everyone is in a place where life insurance is necessary for their estate plan. For example, if you are single with no children or dependents, or find yourself with enough assets to provide for your family on your own, life insurance may not be appropriate. Be sure to talk with an advisor to understand if life insurance makes sense for you!

4. Create a Will

A will is likely the keystone to your estate plan. With it, you leave little room for interpretation about your wishes as it states how your possessions will be distributed and managed once you have passed.

Why create a will?”, you may be wondering. Ultimately, it specifies how your assets will be distributed, including items with both financial and sentimental value. It’s important to recall that some of your assets will pass to your designated beneficiaries or joint owners (see #1: Review Asset Titling and Beneficiary Designations). Even so, doubling-down with instructions in your will can help prevent misunderstandings among loved ones.

Not only does a will outline asset distribution, it can also help you:

  • Designate an executor to settle your estate and manage the probate process. 
  • Name a guardian to watch over your children should you have minors.
  • Outline how debts, taxes, probate fees, and other costs are to be paid at death. 
  • Provide details for covering loved ones’ living expenses until assets are distributed. 
  • Direct assets to a trust for members of your family or other beneficiaries. 

A final note to parents: you need a will. Period. A will is the legal instrument you can use to name guardians for your minor children. Without a will, the state will choose a guardian from among your relatives, and it may or may not be the person you would have chosen. 

5. If Necessary, Establish a Trust

The last item on your estate planning checklist may be the creation of a trust. A trust provides control of your assets throughout your lifetime and beyond. With it, you can exert more influence, reduce estate taxes, and manage probate more effectively. 

You may be asking, “Why would I need a trust?” Depending on your situation, you would consider establishing a trust to:

  • Manage your assets should you become incapacitated and unable to speak for yourself. 
  • Manage assets for a minor child. 
  • Minimize any estate taxes. 
  • Distribute assets without going through probate.
  • Highlight who you want to carry out your wishes and how. 

You can establish a trust to hold a range of assets, including bank accounts, real estate, investments, limited partnerships, life insurance, and personal property. 

So, “How does a living trust work?” While there are many types of trusts (a topic for another article!), the most common is the revocable living trust. This trust lets you transfer ownership of assets from your name to the trust while naming yourself as the trustee. 

After establishing the trust, you have the same access and control over your assets as before. You can buy, sell, trade, and move assets in and out of the trust. Most importantly, you have the peace of mind knowing your wishes will be carried out should life deliver the unexpected.

Completing Your Estate Planning Checklist

Does the thought of going through an estate planning checklist feel overwhelming? Establishing your estate plan can feel daunting at first. Many avoid making decisions about their death because it makes them uncomfortable. And yet, creating an estate plan can be its own life-affirming opportunity for empowerment. In fact, many clients find the conversation about estate planning to be inspiring rather than depressing. Taking things step by step can help reduce feeling overwhelmed. However, if the thought of tackling your estate planning checklist still feels like it’s too much, we get it and are here to help! Book a 15-minute call with an advisor today to better understand how we can partner with you and ensure your wishes are reflected in your estate plan. 


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