Estate Planning Checklist

Prepare Documents

In estate planning, the most basic document used is a will. The purpose of a will is to allocate exactly where assets should go upon death. This document is also beneficial for younger families to name guardians for children. Wills can be useful for those with large estates, as well as those with little to no assets. Regardless of a a person’s portfolio or age, it is always recommended that a will be drafted sooner than later.

For those with estates greater than the state minimum or those who simply want to ensure that their family will not be required to go through court proceedings, what’s known as a living trust can be very helpful. With living trusts, funds are transferred prior to death into an account. The actual owner of the property put into the trust, but any property within the trust will not have to pass through the probate court before being distributed. This means one less step for surviving loved ones.

Other documents that should be prepared in advance are healthcare directives and a financial power of attorney. A healthcare directive lets family know whether to resuscitate in the event of an emergency as well as whether to sustain someone on life support measures if desired. A financial power of attorney informes relatives of a specific person who is assigned to make financial decisions regarding property, businesses, and investments during incapacitation.

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Name Beneficiaries

A useful way to handle accounts outside of probate and make transfer faster is to name beneficiaries for all bank, investment, and life insurance accounts. By naming a beneficiary for these accounts, all that is required for account transfer is a notarized death certificate. These accounts will not need to go through probate, although there may be some associated taxes due.

The other benefit of naming beneficiaries is that it keeps accounts private. Unlike accounts that go through probate, which are public record, accounts with named beneficiaries are not considered part of the deceased’s estate, therefore they are not public record. This means that creditors and collectors will never be aware of these accounts or have access to them.

In addition to naming beneficiaries, it will make the process smoother if a list is prepared in advance with the account information and the named beneficiary listed. This will allow the estate’s executor a simple means of contacting the institutions. Remember that any unclaimed accounts eventually close and become property of the state.

Obtain Insurance

Most unplanned estates are completely spent on assisted living care during the final duration of an individual’s life. The best way to protect hard-earned assets and ensure a larger inheritance for family is to obtain medical insurance in advance. When plans are set up during one’s 50’s or 60’s, the rates are lower and will cover later years so long as the fee is continually paid. Examples of useful insurances to maintain include long-term care insurance that will cover the cost of assisted living, major medical insurance that covers surgeries and emergencies regardless of the rising cost of care, and disability insurance that covers expenses in the event that work becomes impossible.

Additionally, everyone should obtain some form of life insurance. Life insurance policies ensure immediate funds for named beneficiaries upon death. The two types of life insurance are term and whole. Term life insurance works similar to car and homeowner’s insurance: the owner pays a small fee regularly and the insurance pays upon death. Whole life insurance is more of a savings account where funds are deposited regularly and interest accrues; after a certain number of years, the policy company pays a larger amount.

Pre-plan a Funeral

Funerals are expensive and must be planned in a very short amount of time. By preplanning and ideally pre-paying for the funeral arrangements, family will have one less burden. There are many avenues by which funeral arrangements can be made. The primary way is through a funeral home. A funeral home can provide pricing and forms to assist in planning everything down to the music and person performing the ceremony.

Additionally, it is helpful to keep organ donor or body donor information at hand for easy access and review. Most states allow a listing of organ donor on a driver’s license or identification card. For those donating their body, the organization typically provides a card to be placed in a wallet. The advantage of being a body donor is that the organization typically provides all memorial arrangements.

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Consider Business & Investment Matters

For business owners, preparing a business succession plan ensures that the company will continue once the creator or main partner is gone, if so desired. Forms for business succession plans can be found on most state websites under the business sections. In many states it is as simple as drafting a basic letter or even listing names of successors and filing the form.

For online businesses, it is also useful to have a record of all account information and passwords, along with the program files for successors to obtain access to the website. If the website was being paid with a particular bank account, this information should also be available as many hosting services require verification.

Case Studies in Estate Planning

Case Study 1: Maximizing Asset Protection

John, a retiree with substantial assets, utilized various insurance policies to protect his estate and ensure a larger inheritance for his family. He obtained long-term care insurance to cover potential assisted living costs, major medical insurance to safeguard against rising healthcare expenses, and disability insurance to provide financial support in case he became unable to work.

Additionally, John secured a comprehensive life insurance policy to provide immediate funds to his beneficiaries upon his passing.

Case Study 2: Streamlining Asset Transfer

Emily, a meticulous planner, named beneficiaries for all her bank accounts, investments, and life insurance policies. By doing so, she ensured that these assets would bypass the probate process, allowing for a faster and more private transfer to her chosen beneficiaries.

Emily also maintained a detailed list of account information and named beneficiaries, facilitating easy communication with financial institutions and minimizing the risk of unclaimed accounts.

Case Study 3: Funeral Planning and Organ Donation

Sarah, a forward-thinking individual, took proactive steps to pre-plan and pre-pay for her funeral arrangements. By working with a funeral home, Sarah relieved her family of the burden of making funeral decisions during a time of grief. She also kept organ donor information readily available, either through a driver’s license designation or a donor card, ensuring her wishes were known and respected.

Case Study 4: Business Succession and Online Assets

Michael, a small business owner, created a business succession plan to ensure the continuity of his company after his passing. He identified successors and drafted necessary documents to legally transfer ownership. In addition, Michael maintained a record of all online business account information and passwords, along with program files, enabling his successors to access and manage the company’s online assets effectively.

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