Estate Planning Checklist: 10 Steps to Help You Prepare

Man sitting with his dog in a field by a tree line thinking about his estate planning checklist

Estate planning can refer to a broad range of topics. But we're all human, so some version of an estate plan can be useful, though your exact approach will depend on your circumstances.

If you're ready to start, this estate planning checklist can help you think about how you may want it to look.

Key Takeaways

  • Take inventory of your financial accounts, assets, and debts.
  • Consider what you want to happen in the event of your death or incapacitation.
  • Identify potential financial risks and consider insurance options.
  • Review and update beneficiaries on accounts and policies.
  • Create a will, evaluate powers of attorney, and plan for healthcare instructions, child care, and trusts.

1. Take Inventory

You may want to start by seeking clarity on where you stand financially.

  1. Gathering information on your financial accounts, including bank accounts, investment accounts, retirement plans and other assets.
  2. Put together a list of your property such as real estate, automobiles, jewelry and other valuables.
  3. Write out the debts you owe on paper or in a digital spreadsheet. Consider accounting for any liabilities, including money you owe on a home loan, vehicle loans and other obligations.

2. Ask Yourself "What If?"

Consider what you'd like to occur if you were to die or become incapacitated. Are things currently arranged the way you want? Thinking about these topics might not be fun, but it can help you provide for your loved ones when the inevitable happens.

3. Identify Risks

You may want to estimate any financial burden that might arise if you or someone else died or lost your income. Consider preempting those losses with life insurance or disability insurance.

4. Review Beneficiaries

On some accounts, like retirement accounts or life insurance policies, you can select who receives assets when the account holder dies. Doing so can simplify some asset transfers and potentially bypass the probate process. But it's important to keep your beneficiaries up to date and keep in mind that those instructions typically override instructions in your will.

5. Consider a Will

A will allows you to officially provide guidance on how to handle your affairs when you die. You can specify who receives remaining assets, who should care for surviving minors and who should manage your estate's finances. You can specify who receives remaining assets, who should care for surviving minors and who should manage your estate's finances.

A legal will sets a framework that your personal representative is required to follow, potentially helping to reduce conflicts or questions among your beneficiaries.

6. Evaluate Powers of Attorney

Setting up an estate plan isn't just about death. Who will make decisions and handle logistics if you're incapacitated or unable to do so? A power of attorney is a legal document that grants someone else control over your affairs in the event that you want or need such person to act on your behalf. There are different types of power of attorney, and this power of attorney document will include the details of who is allowed to make which decisions.

7. Decide on Health Care Instructions

In addition to preparing for your financial needs, you can guide health care decisions as well. Here are a couple documents to consider including in your estate plan:

  • Health care proxy: A health care proxy, similar to a power of attorney, can receive confidential information and provide medical instructions with the proper authorizations in place. Think about who might be equipped for this job, while remembering this may be a stressful and emotionally demanding role.
  • Living will: You can provide advanced directives that explain what types of medical care you want (and don't want) in specific circumstances through a living will.

8. Plan for the Care of Any Children

If you're responsible for somebody else, evaluate alternatives for their care if you die or become incapacitated. You may want to name adults you trust to care for your children. Consider asking an attorney in your state how to best handle finances for minors or anyone else who cannot manage their own affairs.

9. Investigate Trusts

Trusts are legal entities that can hold assets, and some people use trusts in their estate plans. A trust could help streamline the distribution of assets, manage money for minors or serve other needs.

A trust could help streamline the distribution of assets, manage money for minors or serve other needs.

Whether or not trusts are right for you, it's helpful to have a basic understanding of when they might be useful.

10. Review the Plan Periodically

Life circumstances change, so you might want to revisit your estate plan regularly. Think about whether your needs or goals have changed since you formed your plan. Whether your financial position changes or you view the world in a different light, you may find it necessary to adjust your plan.

You'll also likely want to review your beneficiaries to verify that assets will pass on the way you want them to. With marriages, divorces, births and deaths, you may want to update these designations. Finally, consider staying up to date on industry and legal changes. As the world evolves, you may have new opportunities available to you.

The Bottom Line

This estate planning checklist can help you make a plan and get organized. But planning your estate is a broad and complicated journey, so consider speaking with a tax or legal professional, as well as your financial representative. Doing so can bring additional insight into your specific circumstances, and ideally you'll end up with an estate plan that serves your family well.

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