Estate Planning Checklist

You know you need an estate plan, but where to begin? An effective estate plan can provide you with a measure of control over your future, as well as the future of your estate and your family’s financial well-being, even after you’re gone. Building that estate plan, however, can be overwhelming, but it doesn’t have to be.

If you’re looking for a good place to start, try this simple Estate Planning Checklist. You can quickly and easily gauge your preparedness and identify important elements you may need to address.

Before you complete this checklist, the first question to ask is whether you have an existing estate plan. If so, that's great. However, if you developed it some time ago, you’ll need to take steps to review and update it to ensure it’s reflective of your current circumstances and wishes. If changes are significant, you might need to seek professional help to update your estate plan.

Another point to consider is whether your estate plan is coordinated with all other necessary planning documents. For example, does it make clear your beneficiary designations? Does it include information about life insurance policies? What about your banking and investment accounts? Are there any minors in your care, and, if so, have you included guardianship designations? Another matter is that of your digital estate. Every important detail needs to be officially documented and the information kept up to date.

Finally, there are matters of a more personal nature that require honest reflection. Do you still feel comfortable with any executors or trustees you previously designated? Have you discussed with your spouse, partner, children or other beneficiaries about whether they’ll be able to maintain their current lifestyle in the event of your death?

With so much to consider, details can easily slip through the cracks. An estate planning professional can help ensure this doesn’t happen. This checklist, however, can help you assess where you are in the estate planning process and identify areas to address. In this article, we’ll also walk you through some key estate planning steps and strategies.

Step 1: Prepare a Will

Perhaps the foremost and most basic component of estate planning is to prepare a detailed, comprehensive will. This legal document presents your wishes for the distribution of your property and other assets and makes arrangements for the care of any minor children, among many other important details. Engaging an estate planning attorney will help ensure that your will is legally sound and reflects your goals and valid under your state’s law.

Step 2: Draft a Power of Attorney

Drafting a Power of Attorney (POA) is a vital step in your estate planning process. This document appoints a trusted “agent” of your choosing to make financial and legal decisions on your behalf in the event you are unable to make these decisions for yourself. You’ll need to specify the scope and durability of powers, and consider whether you want them to take effect immediately or only under certain conditions. A legally sound and personalized POA can facilitate and ensure more seamless management of your affairs and adherence to your preferences.

Step 3: Create an Advance Healthcare Directive

Advance healthcare directives are also legal planning documents that are an important piece of the estate planning process. These directives are written instructions about your medical care and wishes in the event that you can no longer make your own decisions or communicate your preferences. Most often, they also legally designate someone else to make additional healthcare decisions for you when you are unable to do so.

Along these same lines, you might also want to leave written instructions for your funeral or memorial service. It might not be necessary for you to legalize these plans, but including these instructions in your estate plans can be extremely helpful to your loved ones.

You might hear such a planning document referred to as a Letter of Instruction, which is an informal, yet typically effective, document. A Last Will and Testament, however, is a legal document—a will—that may also include instructions for funeral and burial.

Step 4: Utilize Gifting

Incorporating giving into your estate plans has different advantages. It allows you to express your philanthropic and financial values, for one. But, it can also provide a way to reduce estate taxes while staying within estate tax laws. Estate gifting enables you to strategically transfer portions of your estate to your heirs and beneficiaries during your lifetime. Gifting certain assets or amounts early can qualify for a gift tax exclusion. It can also help facilitate a smooth transfer of wealth, which you’ll get to witness and enjoy firsthand.

Other estate gifting options may be suitable for you as well, such as a Charitable Remainder Trust.* This strategy could enable you to defer capital gains taxes on high-value assets, while also providing an immediate charitable income tax deduction and a potential increase in your income. Not all gifting strategies are right for everyone, so be sure to consult a professional.

Step 5: Minimize Estate Taxes

One of the main advantages of estate planning is that you can structure the transfer of wealth so as to minimize the impact of taxes on your legacy. By employing strategic measures such as that of strategic gifting outlined above, establishing trusts and leveraging other applicable tax exemptions, you can potentially reduce the tax burden on your estate.

Be aware that if you move to a new state, you may need to update your strategy to coincide with local tax laws. Likewise, you might want to rely on an estate planning professional to keep you apprised of the latest estate tax laws and to help you update your plans accordingly.

Step 6: Leverage Trusts and Other Transfer Vehicles

Trusts are a common legal mechanism for defining how money or property will be distributed, transferred, and/or managed for named beneficiaries, including underage children and beneficiaries with special needs. There are a number of strategies and types of trusts you could leverage. An estate planning professional can help you determine the most appropriate options for your goals and situation.

Step 7: Incorporate Professional Help

There are all kinds of professional services that can help support you through the process of estate planning. Most obviously, you may need legal guidance as you navigate the many legalities of your estate plan. You might also want to seek the input of a tax professional, medical professional, and other ancillary advisors.

Worth noting, too, is that an estate planning specialist can provide you with more holistic guidance across your estate plan as a whole. Their expertise in this area is invaluable, as they can lead you through this process to ensure that your estate plan is, in fact, comprehensive and in keeping with your wishes.

To help you gather a more complete picture of your overall preparedness when it comes to estate planning—and to help you identify important next steps—download and complete this free Estate Planning Checklist, and contact the office with any questions you may have.

^{*The use of trusts involves a complex series of tax rules and regulations. You should consider the counsel of an experienced estate planning professional or estate planning service before implementing such strategies.}

^{This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.}

^{For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera nor any of its representatives may give legal or tax advice.}