Estate Planning Checklist to Put Affairs in Order

Estate planning goals include designating who will receive your property when you die and who will be in charge of your personal, legal, and medical affairs if you become incapacitated. A well-constructed estate plan ensures that heirs receive assets, while managing and minimizing estate taxes, gift taxes and other taxes.

Preparing information for meeting with an experienced estate planning attorney will be easier if you break out the tasks into these seven steps, explains the recent article, “Estate planning checklist: A 7-step guide to getting your affairs in order” from Fox 54.

Create an inventory. Tangible assets include your home and other real estate, vehicles, cars, boats, RVs or motorcycles, coin collections, art, antiques, or other personal possessions. Liabilities also need to be listed. These include mortgages, lines of credit, credit card debt, student loans and any outstanding debts.

Determine the family’s needs. Start by preparing a last will and testament with an experienced estate planning attorney. Next, make sure you have enough life insurance. How much you need depends on whether you are married, if your family’s current lifestyle requires two incomes and if you have dependent children.

Your will is the document used to name a guardian for your minor children, and a backup guardian, in case the primary guardian cannot or will serve. Without a will, including your wishes for a guardian, the court will choose who will raise your children. It might not be the person you would want.

Establish directives. An estate plan may include a trust. With a revocable legal trust, your assets go into the trust, and a trustee manages the assets. If you become incapacitated, the trustee takes charge of the assets and their distribution. When you die, the trust transfers assets to designated beneficiaries, bypassing probate. You can also have your estate planning attorney create an irrevocable trust, which can’t be changed once created.

A medical care directive, also known as a living will, spells out your wishes for medical decisions, if you can’t make those decisions yourself. Depending on your state of residence, these documents may be combined into one, known as an Advance Care Directive.

You’ll need a Power of Attorney to give another person the ability to manage financial affairs if you cannot. A designated agent can pay bills and manage all assets. Your estate planning attorney will help you determine how much power to give your agent. You could give your agent the power to pay bills and manage investments but not to sell your home, for instance.

Review beneficiaries. Most retirement accounts, investment accounts and insurance policies include the option to name beneficiaries who receive assets upon your passing without going through probate. People often forget whom they named on accounts established decades ago. Never leave a beneficiary designation blank. If that happens, the assets will be distributed based on the state’s property distribution laws.

Plan for estate taxes on the federal and state level. Only very large estates are subject to estate taxes on the federal level. If you have an estate exceeding $12.92 million, you may consider a Grantor Retained Annuity Trust, or GRAT, a type of irrevocable trust. Some states have estate taxes, and some states have inheritance taxes.

Speak with professionals. Even simple, straightforward estates benefit from the knowledge of an experienced estate planning attorney who knows the ins and outs of your state’s laws.

Plan to reassess every three to five years. Life changes, and so should your estate plan. Your estate plan must be reviewed when life circumstances change, including marriage, divorce, welcoming a new child to the family, getting a new job, or being terminated. Even if your life doesn’t change, the laws change, and new opportunities for maximizing your estate and minimizing taxes shouldn’t be missed.

Call Attorney John Hoffman, Jr. to get your estate plan in order!

Reference: Fox 54 (July 24, 2023) “Estate planning checklist: A 7-step guide to getting your affairs in order”