Plan For Tomorrow | What should be on your estate planning checklist?
A retireed woman reviews her financial information.

What should be on your estate planning checklist?

Thursday 30 July 2020 | Reading Time: 4 minutes

Creating an estate plan helps you put your affairs in order and allows you to clearly outline how you want your assets to be distributed after you pass away or if you’re incapacitated and unable to make decisions on your own. A thorough plan includes instructions for your health care, final arrangements, distribution of property and assets, and guardianship of your children. No matter your income level or net worth, planning the transfer of your assets now can help minimize taxes and lessen the financial burden on your beneficiaries. As you create your estate plan checklist, here are seven items you’ll want to include to help safeguard your legacy.

1. Take inventory of assets

A good place to start the estate planning process is to create a list of all the properties you own. Begin by listing all of your tangible possessions, including:

  • Housing—house, condo, land, or other properties
  • Vehicles—cars, motorcycles, boats, aircraft
  • Collectibles—jewelry, trading cards, rare coins, artwork, etc.

Next, make a list of all of your intangible assets, for example:

  • Checking and savings accounts
  • Certificates of deposit
  • Stocks, bonds, and mutual funds
  • Proof of Business Ownership
  • Retirement accounts—401(k) plans, individual retirement accounts
  • Health savings accounts
  • Life insurance policies

Once you have an inventory, you will want to gather any estate planning documents, including recent statements from your bank, life insurance company, and retirement accounts, and estimate the value of each item using appraisals or your account statements.

2. Assign power of attorney

Naming a financial power of attorney (POA) will grant someone the authority to manage your finances and make decisions on your behalf if you’re medically unable to do so. Your designated agent can act on your behalf in legal and financial situations, access and manage your assets, and pay your bills and taxes. Without a power of attorney, a court may decide what happens to your estate if you are found incapable of managing it and a probate judge will appoint a guardian or conservator to oversee the management of your estate.

3. Finalize wills and trusts

Your will is an important part of your estate plan and dictates how your assets will be distributed after your death and who will be the guardians of your minor children. Make sure the wording in your will is consistent with the way you’ve allocated assets in other documentation, such as insurance policies or retirement accounts, to prevent it from being contested. Remember, that without a will, your estate may be left to state officials who will decide how your beneficiaries will receive your assets. You may have a lawyer draft a will or you can prepare one yourself using online and offline resources. If you choose to draft one yourself, you will need to sign it in front of witnesses. Witnessing laws vary by state, but typically it is two witnesses who are not named in your will.

A trust allows you to designate portions of your estate to a trustee while you’re still alive. Unlike wills, most trusts cover a specific asset, such as a piece of property, rather than your entire estate. A trust is often set aside for underage beneficiaries who can only claim it when they are old enough to manage assets.

4. Name beneficiaries

Naming your beneficiaries is an important aspect of the estate planning process. Your bank accounts, life insurance policies, individual retirement accounts, annuities, and brokerage accounts all likely require you to name a primary beneficiary, and often a secondary beneficiary. Regularly review these designations, especially after certain life events like the birth of a child, marriage, or divorce. Like wills, trusts, and power of attorney, if you don’t name a beneficiary or the beneficiary is underage or has passed away, a court will likely decide what happens to your estate.

5. Appoint a guardian

An estate planning document you will want to make sure is included is a guardian designation. This allows you to name a person to act as your guardian should you become incapacitated, as well as designating a guardian to any minor children or children with special needs if you passed away. If you do not appoint a guardian, the court will often decide who will take care of your children.

6. Include a letter of intent

A beneficial piece to add to your estate plan is a letter of intent that outlines your personal and final wishes in more detail. These letters are not legally binding but can give your executor or family members more information about your funeral and burial arrangements, financial information, digital information, and personal items. While this document is not considered a valid legal document, it can help a judge understand your intentions, which will aid in the distribution of your assets.

7. Connect with the experts

Connecting with a financial professional, attorney, and/or estate tax professional can be helpful to ensure all your estate planning documents are in order or if you need some assistance getting started. These experts can simplify the process and help you navigate state regulations and inheritance taxes. They can also answer questions, discuss your goals, and be a helpful resource for your loved ones after you’re gone.

Whether you put an action plan together on your own or use the guidance of a professional, creating a sound estate plan can help you feel more confident about the distribution of your assets, lessen the financial burden on your family by minimizing legal and tax issues, and ensure your final wishes are honored after you have passed.


REV 12/2022