Estate Planning Checklist: 10 Things to know before getting started

When it comes to estate planning, a common misconception is that people only need to consider it in their later, post-retirement years. Proper estate planning serves an integral part of every financial plan at every phase of life. Use the following estate planning checklist to discuss these important issues with your financial advisor and attorney.

1. Make a will

Everyone has heard of wills. In a will, you state not just who will inherit your property, but also who is responsible for settling your estate. If you have children, this is where you nominate guardians to care for children should something happen to you and the other parent.

2. Make a durable power of attorney for finances

A lesser known document, the power of attorney, names someone who steps in to manage your finances if you are no longer able to do so. From simple issues like paying bills, to making decisions for a family business, the power of attorney provides much needed flexibility and assistance when needed.

3. Make a health care directive

The health care directive is a dual-use document, as it both provides instructions regarding your health care wishes, and also appoints someone to ensure those wishes are followed. While contemplating your decisions may seem challenging, it is always better to write your wishes down than to put family members in the position to make hard choices for you.

4. Review and file beneficiary forms of insurance, pensions, and retirement plans

Life Insurance, 401(k)s, IRAs, many pensions and other accounts all pass according to the named beneficiary. It is vitally important that these accounts not only name a beneficiary, but that the beneficiary has been reviewed or updated. A divorce, second marriage, new children, family death or other events may alter the desired distribution and complicate matters if not updated.

5. Review title of ownership for assets, such as real estate

Many assets will transfer according to the title the asset is held in, such as joint tenant property. Bank accounts and the deed to a family home may need to be changed in order to facilitate the transfer you desire.

6. Discuss the benefits of a trust with an attorney, accountant, or financial advisor

A living trust allows you to title assets in the name of a trust and establish a trustee to manage those assets, both during life and after death. The benefit to your estate of using the trust is the ability to avoid assets passing by way of the probate court, which is a time-consuming and expensive process.

7. Plan for your business

For family businesses, sole proprietorships, partnerships and other businesses, it is always important to establish a succession plan. Often this may include the use of a buyout agreement.

8. Organize your documents

It is important that your will, trust, insurance policies, account statements, real estate deeds, and other documents be in a place your family can access them when they need. One big mistake people make is locking all these documents in a safe-deposit box where they cannot be accessed easily because they do not have a key and do not have authority to open the box.

9. Understand probate fees may cost you more than estate taxes

In the past, the primary concern was the high estate tax, or what many called “the death tax,” being applied to lower-value estates. Today, the estate tax applies to very high-value estates. What should be a greater concern is the high fees and long process of the probate courts. Speaking with a financial advisor or attorney can help you determine the tax and fee exposure your estate may face.

10. Carefully consider the best fiduciary for your plans

The executor of the will, the trustee of the trust, the power of attorney, and the health care agent are all your “fiduciaries” who act on your behalf. It is important to select people you trust and who are capable of doing the job. When you do not have a friend or child you can rely on, there are companies and individuals who do this job at a professional level.

BONUS : Download our Estate Planning Webinar

As with all financial plans, your estate plan must be customized to your particular assets and set of circumstances. The above estate planning checklist is a great guide to begin the discussion with your financial advisor or attorney.

Schedule a free consultation with our team to discuss how you can best leverage your assets amidst these uncertain times.

Matthew Belardes Wealth Management Specialist at Capital Growth in San Diego


Matthew Belardes

Matthew is a Wealth Management Specialist at Capital Growth. He specializes in Estate Planning.  In his free time, Matthew is an avid reader of political theory and history. Learn More.

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