Preparing an estate planning checklist goes beyond will-writing. It’s a smart way to ensure the seamless execution of your finances, assets, and plans for your family members after your passing. 

We understand that for some individuals, creating an estate plan can be challenging as it confronts them with their own mortality, a topic that most people find difficult to contemplate. However, estate planning can also serve as an opportunity to demonstrate your love and care for friends and family by designating specific assets for them. Additionally, it acts as a means to relieve your loved ones from the burden of managing your estate for an extended period of time.

Why is an estate planning checklist important?

estate planning

An estate plan is a crucial component for individuals, regardless of their wealth. Not only does an estate plan dictate the distribution of your assets to your beneficiaries, but it also serves to shield your loved ones from unnecessary complications, expenses, and protracted legal procedures that can stretch on for months or even years.

Developing a good estate plan yields numerous advantages for you and your family, ensuring a streamlined probate process, cost reduction, avoidance of delays, and privacy. When executed correctly, an estate plan can substantially minimize the tax burden and fees imposed on the estate upon your passing.

Does everyone need an estate plan?

Everyone needs a will. It is a crucial component of an estate plan. Regardless of your financial situation, you must have an estate planning checklist in order which involves aspects such as designating guardians for your minor children and guaranteeing the appropriate distribution of your assets to chosen beneficiaries. If you keep your estate planning documents in order, you don’t just make your property inheritance easier to manage for yourself, but also for those who’re left behind.

Do remember that in the event of your passing without a will, your estate will undergo the probate process, where the probate courts will determine the rightful recipients of your assets.

How to create an estate plan checklist?

Creating an estate plan can be a relatively simple process and not so expensive. The following are the essential components of an estate plan that can facilitate a faster and more adaptable resolution of your estate. 

Keep all the useful legal documents handy

Having the relevant documents readily available is a must. Also, do keep in mind that the specific requirements may differ depending on the intricacy of your estate. It is advisable to possess the following papers:

  • Insurance policies, particularly those pertaining to life and disability coverage.
  • Statements related to your various financial accounts, including savings accounts, retirement accounts, and real estate investments.
  • Documents that validate your ownership of assets, such as mortgages, deeds, and titles.
  • Balance statements that reflect any outstanding debts such as mortgages, lines of credit, or any other loan.
  • To obtain a checklist for your individual circumstances, we recommend consulting an estate planning attorney for legal advice.

Prepare an inventory of all your assets

inventory assets

You need to list both tangible and intangible assets, which extend beyond physical possessions such as owning a car, furniture, paintings, or sentimental family heirlooms. Carefully consider all aspects you wish to address after your demise. It’s a good idea to ensure that your financial accounts are properly documented for the executors of your estate. It’s essential to provide explicit details, ensuring that all your accounts are accounted for in the listing.

Make specific plans for your family in your will 

You’ll also need to consider how your family is taken care of after your passing and what you’ve asked them to do:

  • Specify the guardians if you have any minor children: Although a will commonly addresses the distribution of financial assets, it is essential to include provisions for the well-being of any underage children in the event of your demise, specifically indicating the designated caregiver. Keep in mind that your child’s guardian will also serve as the conservator responsible for overseeing the child’s financial affairs until they reach the legal age of adulthood.
  • Plan how much you want to give to your young children and at what age if something were to happen to you. 
  • Get your life insurance in order: If your finances are not sufficient to provide for your family after you’re gone, get life insurance. It will assist your loved ones in navigating a challenging financial period following your death.
  • Name willing potential executors: Executing your will or property trust can be a challenging responsibility that entails ensuring that your estate follows the appropriate legal procedures. But the most important part is to select capable and willing executors of your will or trust. You’ll need to communicate with potential executors, verify their willingness, and confirm their ability to fulfill the task.

Cover all legal angles with a will, an attorney, and healthcare directives

A comprehensive estate plan comprises three essential components: a will, a power of attorney (POA), and healthcare directives.

  • A will enables you to dictate the distribution of your assets and ensures that you do not pass away intestate, leaving the decision-making process to probate courts.
  • A power of attorney grants authority to an individual to handle your affairs while you are alive. A financial power of attorney becomes particularly significant if you become incapacitated and are unable to manage your finances or pay your bills. On the other hand, a medical power of attorney empowers a trusted person to make healthcare decisions on your behalf when you are unable to do so.
  • An advance healthcare directive informs the medical community about your preferences for health-related decisions in situations where you cannot consciously choose or communicate. This legal document specifies your desired medical treatments, medical decisions about long-term care, and interventions. For instance, you can express in advance whether or not you’ll require resuscitation if terminally ill.

Think of a real estate trust if suitable

real estate trust

Trust is not only for wealthy people. It can prove beneficial even for individuals with more modest assets, such as estates valued as low as $150,000. By employing a trust, one can expedite the probate process, and minimize complex and time-consuming procedures. Furthermore, trusts can complement wills by effectively guiding the distribution of assets to loved ones or establishing a charitable legacy. 

Understand that trusts often necessitate hiring a real estate attorney, particularly when dealing with complicated processes beyond a simple revocable trust. 

Read more: What is a probate sale?

Understand and abide by the estate tax laws

When considering estate planning, it’s crucial to take into account the federal estate taxes. In 2023, the estate tax exemption limit is $12.92 million. That is to say, estates below this value are not liable to pay the tax. Also, any remaining unused portion of this exemption can be transferred to the surviving spouse. What’s more, they can gift up to $25.84 million without incurring any tax obligations. Furthermore, it’s essential to fully understand the impact of estate or inheritance taxes in your particular state as it can vary widely from one state to another. 

Keep updating your plan every five years 

You need to review your estate plan from time to time. This will ensure that your plan still holds relevance and that tax laws are still the same.

Last thoughts

Making a will is only the beginning of passing on your inheritance. You’ll need to also make certain your family members and other beneficiaries are provided for and have access to your assets upon your temporary or permanent incapacitation.

You need to manage your financial affairs. And, ensure that your assets are taken care of after you pass on. This is especially crucial if you have underage children and will need to list their guardians in the absence of a spouse. If you follow the above estate planning checklist carefully, it will save you a lot of hassles. 

How to prepare a good estate planning checklist? was last modified: July 4th, 2023 by Ramona Sinha
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