Estate planning can seem like a morbid topic, but it is an important way to protect your wishes and loved ones in the event of your death.
No matter your age, creating a comprehensive plan that provides clear guidelines for the division of your assets will give you peace of mind. Estate planning is more than just writing a will; it covers what medical care you will receive in the event of incapacitation and even your funeral wishes. In this article, we provide the ultimate estate planning checklist to ensure your affairs are in order.
Estate Planning Checklist
- Inventory your belongings and assets
- Create a trust for dependants and pets
- Plan out an inheritance for your family
- Review your insurance
- Create a living trust for yourself
- Write your will
- Create a list of important documents or accounts
- Select a power of attorney and executor
- Plan your funeral
- Write a letter to loved ones (optional)
- Share your wishes with family members
Inventory Your Assets
Write an inventory of your assets and anything you may want to bequeath to family and friends. This will help you to ensure your will and estate planning covers everything. Calculate the value of each of the assets to create fair and equal inheritances for your loved ones.
Your assets will include things like:
- Property/real estate
- Savings accounts
- Stocks, bonds, and mutual funds
- Life insurance
- Business ownership
- Retirement funds
- Collectables such as art, coins, antiques, or other valuables
- Family heirlooms
- Health saving accounts
Account For the Needs of Your Dependants and Pets
If you have children under the age of 18 or care for family members with special needs, your estate planning needs to account for their future. The same goes for your pets.
Accounting for the needs of dependents and pets consists of two parts:
- Naming a guardian for them after your death – you should discuss this with the people you intend to name as guardians to ensure they are able and willing to do so. For dependents with special needs, this may be an assisted living facility. In that case, research the best option and how much it will cost.
- Creating a trust for the cost of the dependants’ care - this will depend largely on the age of the dependants and their needs. A trust document will clearly outline what the fund should be used for.
- Creating a college fund for your children – if you do not already have one, create a fund for your children to use towards college or a house. You can add instructions in your will for a portion of the inheritance to go into this fund too.
Plan Out Inheritance For Your Family
Write a list of the parties you want to bequeath in your will.
This may be:
- Family and friends
- Business partners
Start by listing any specific items you want to bequeath to each of the parties and their value. If you want to keep your will as fair and even as possible, then you may need to consider the value of any heirlooms and keepsakes you might bequeath.
Plan the inheritance in advance so you can give it full thought before you write your will. This is a part of estate planning you should not discuss with family and friends as people may try to influence your decisions.
Review Your Insurance
If you do not already have life insurance, it might be worth considering it as part of your estate planning.
Life insurance is useful if:
- The loss of your income would create financial hardship for your immediate family
- You have dependants with special needs or minor children
- Your business partners will need to buy out your interest in the case of your death
If you already have life insurance, check on who you have named as the beneficiary. You may name a specific person or a trust as the beneficiary of the life insurance payout after your death. This sum will automatically go to the beneficiary, regardless of if your will says differently, so it is important that you update your insurance beneficiary.
Create a Living Trust For Yourself
A living trust is a fund to be used for any medical costs or assisted living facilities while you are alive. This money will be controlled by you or your trustee in case you become incapacitated or are no longer able to make medical decisions. Your trustee may be your financial power of attorney. A living trust ensures that you have a financial plan in place for any accidents or deteriorations in health.
Create Medical Care Directives
A medical care directive lays out what your wishes are in the event you are incapacitated. This will instruct your loved ones on if you want extraordinary measures taken. Your medical power of attorney will make decisions that fall outside of your medical care directives, but it will serve as a guide to your overall wishes.
Write Your Will
Now that you have considered your assets, the needs of your dependents, inheritance, and life insurance, it is time to write your will. Your will should clearly lay out how all of your belongings and assets will be allocated. Anything that is not covered in the will would be assigned as per the legal process rather than your wishes.
If your estate planning is straightforward and you don’t have too many assets to bequeath, then you may use an online will writing service to create a will. If you have a complex estate, then you might consider seeking the help of a lawyer to help you. You should update your will any time your circumstances change so that it reflects your current wishes.
Examples of a change of circumstance include:
- Birth of any children
- Death of family members
- New charities you would like to support
Ensure that the executor of your will or your attorney knows where your will is stored so they can present it upon your death.
Create a List of Important Documents or Accounts
You will not be around to answer questions anymore, so you need to create a comprehensive guide to your important documents and important accounts and account numbers. This will help your executor and family members find information easily and start the process of receiving the bequeathment and inheritance tax.
Select Your Powers of Attorney and Executor
These three people are key to estate planning. You will need to decide who you trust and discuss if they are willing to take on the role.
- Executor – the executor ensures the directives of your will are carried out. They will also resolve any disputes that occur as a result of the will.
- A medical power of attorney – the medical power of attorney will make decisions on your medical care if you are medically unable to. This needs to be someone you trust to follow your wishes, and you may find it helpful to create a list of medical directives to guide them.
- A financial power of attorney – the financial power of attorney may be a separate person from the medical power of attorney. They will handle the allocation of funds while you are living if you are medically unable to make decisions for yourself.
Plan Your Funeral
Funeral planning can be extremely stressful at a time when your family are already grieving. By creating a complete guide to your funeral, you can help remove the stress for your loved one.
Write down your wishes for:
You can even write down if you wish the flowers to be donated after your funeral or if they should go home with a family member. Funerals can be expensive, so you can take the time to calculate the costs of your desired funeral and put aside money to ensure your family do not have to deal with the cost.
Write Messages For Your Loved Ones
This is completely optional, but many people like to write letters for their loved ones to give them comfort and a way to remember them after their death. It is a great way to ensure nothing is left unsaid and that you get to pass on any life advice you wish to share with your loved ones.
Share Your Wishes With Your Family
Your partner should be a part of your estate planning process, especially if you have joint income and assets. You want to ensure the contents of your wills are complimentary; otherwise, if both of you pass away at the same time, it may cause ambiguity.
Your family should also be aware of your wishes for end of life care, funeral wishes, and the care of dependents and pets. You should not discuss the contents of your will with family members under any circumstances as they may try to influence their inheritance or cause resentment in your family. Regardless if the inheritance is split equally or you decided to leave everything to charity, someone will always be unhappy with how you allocated the inheritance.