Your complete estate planning checklist

Get your estate plan in order with these seven steps.

Derek SilvaElissa

Derek Silva & Elissa Suh

Published September 2, 2020

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KEY TAKEAWAYS

  • You can protect your wealth and loved ones by creating an estate plan

  • Without a will, the probate court will determine your heirs

  • Don’t forget to establish a health care proxy and financial power of attorney

  • Take extra planning measures if you have an especially large or complex estate

Estate planning covers two main issues: what happens to your things after your death, and what kind of care you want to receive should you become unable to take care of yourself or manage your own affairs.

The way you address these issues is with an estate plan. Your estate plan is a collection of documents with your wishes and instructions for the management of your estate before and after your death. Your estate is simply everything you own at the time of your death. You can get started on your estate plan by downloading the Policygenius app and creating a will, a trust, or both.

It can be daunting to plan for your own death and it's easy to ignore when you're young. However, having a strong plan in place will make things a lot easier down the line for your future heirs by ensuring they receive the assets you intended for them. An estate plan can also prevent loved ones from having to make difficult decisions while they're grieving and an elongated probate process.

1. Make a list of estate assets

The best way to start estate planning is with an inventory of all the assets you need to pass to your heirs. As you make this list of assets, also mention if anything is jointly owned or jointly titled (which may be the case if you live in a community property state). Make sure you consider all of the following assets if you have them:

  • Real estate
  • High-value personal property (art, jewelry, rare coins)
  • Sentimental personal property
  • Bank accounts
  • Retirement accounts: IRAs, employer-sponsored accounts, pensions
  • Health savings accounts
  • Investment and brokerage accounts
  • Paper certificates, like a treasury bond
  • Business interests
  • Insurance policies
  • Digital assets (account emails and passwords)
  • Liabilities and debts

You should make note of things like all the credit cards you have and where you receive your paychecks. After your death, someone will need to make sure your bills get paid. Having a list of all your accounts can make this process much easier. Someone will also need to file an income tax return for you, so try to keep information on your previous tax returns in one place.

Think you’re forgetting something? See what types of assets you might have.

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2. Answer these key questions about your estate plan

As you go through the estate planning process, you should make sure that you answer the following questions:

  • What assets do you need to pass on to your heirs?
  • Who are your beneficiaries and how much should each person receive?
  • Who do you want to disburse your assets and manage your estate?
  • Who will become the guardian of any minor children?
  • Do you need to plan for a blended family or special needs child?
  • What kind of end-of-life care do you want to receive if you can’t care for yourself?
  • Who do you want to make financial and medical decisions for you if you become incapacitated?
  • How much do you expect your estate to be worth? Are you worried about inheritance or estate taxes?

If your estate plan doesn't provide an answer for each of these questions, you should revisit it. Instead of creating completely new documents, you may be able to revise the estate planning documents you already have.

3. Write a will, consider a trust

Your last will and testament, or simply your will, covers who gets what assets and how much they should each receive. At the very least, you should have this important document, which can also name a guardian for your minor children and nominate an executor to manage your affairs once you’re gone. It's possible that you don't have many assets or don't care who gets them, but you can make things a lot simpler for your loved ones by planning what happens to your things. Creating a will is straightforward — you can even make a will online. Dying without a will means the probate court will determine who becomes your beneficiaries.

Other estate planning options to consider:

  • A letter of instruction to state personal wishes and desires, although it has no legal effect.
  • A life insurance policy to financially protect your spouse and dependents regardless of your assets
  • A living trust if you want more control about what certain heirs should receive. (Learn more about how a trust works and its benefits.)

The Policygenius app contains attorney-approved tools that will help guide you through the process of creating a will, a revocable trust, or both. Our app can assist you with listing your estate assets, determining who you want to give things to, and assigning key people to your estate plan.

4. Plan for future medical and financial decisions

In the event that you become incapacitated and unable to take care of yourself, your loved ones can know the health care treatment you wanted to receive via your living will. (Be careful not to confuse this with your regular will.)

A living will, also called an advance directive, should cover all your preferences around end-of-life medical care. You can also establish a _ healthcare power of attorney_ also known as a health care proxy that allows you to designate a person to make medical decisions for you if you are unable to.

You should also name someone to manage your legal and financial affairs if you become incapacitated by establishing a durable power of attorney (DPOA). This legal document names who can legally act on your behalf, including if you become mentally incapacitated.

5. Review beneficiary designations

Be sure to complete a beneficiary designation for all your financial accounts, which can become payable or transferable upon your death. These assets, known as payable-on-death (POD) accounts, can pass outside of probate, and are an essential part of your estate plan. Forgetting to designate a beneficiary will tie things up in court. Payable-on-death accounts are one of the few assets you can pass without a will. (In fact, they’re one of the few things you should not put in your will.)

6. Protect your wealth

If you have a large estate, you may need to take a few extra steps to make sure your beneficiaries get the most of your hard-earned wealth. As part of your estate plan you may want to consider asset protection or minimizing taxes (through an irrevocable trust. Only the wealthiest of estates have to worry about federal estate tax, but you may have other concerns, like capital gains tax, or inheritance tax faced by your heirs.

A financial advisor and estate planning attorney will have the knowledge and experience to provide legal advice for these specific situations. As you're considering attorneys, check this guide to finding an estate planning attorney.

7. Keep your estate plan safe

There’s nothing stopping you from letting your beneficiaries or family know the details of your estate plan. You can even give them copies of your will or any other estate planning documents as you see fit. Just be sure to store the originals in a safe place and let your executor know where to find your documents; if no one can find your will, it will delay probate, and if it’s never found it’ll be like you never wrote in the first place.

More ideas on how to keep your will safe.

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Personal Finance Expert

Derek Silva

Personal Finance Expert

Derek is a tax expert at Policygenius in New York City. He has written about multiple personal finance topics in the past, and his work has been covered by Yahoo Finance, MSN, Business Insider and CNBC.

Personal Finance Editor

Elissa Suh

Personal Finance Editor

Elissa is a personal finance editor at Policygenius in New York City. She writes about estate planning, mortgages, and occasionally health insurance. In the past she has written about film and music.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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