Barbara Sadler: Will Estate Planning Checklist

A living trust becomes the owner of assets during your lifetime and avoids probate when you pass away. A testamentary trust comes into effect when you die and may set conditions on the distribution of assets within the trust. These are good options to reduce the tax burden on your estate or to determine the terms and schedule of when assets will be distributed to beneficiaries. This is especially true when you have minor children and do not want for them to inherit everything upon turning 18. A final benefit of creating a trust is that the administration is private which makes it less likely to be contested.

Execute a Health Care Directive

A health care directive, also known as a health care power of attorney, sets out what medical procedures you do not want to receive if you are incapacitated and cannot express your wishes. It also identifies an individual who will make health care choices on your behalf when you cannot. This individual is called a health care agent or proxy.

Execute a Financial Power Of Attorney

A financial power of attorney has limited or broad powers over your financial affairs. You can determine that the power of attorney comes into effect when you are incapacitated and ends when you pass away. Alternatively, a financial power of attorney can take effect immediately and end when you become incapacitated, depending on your circumstances.

HIPAA is a national law that governs the portability of your health coverage and the privacy of your health records. You should make sure your authorizations for who can access your records are up-to-date and still reflect your preferences.

Plan for Your Children’s Inheritance

Decide when and under what conditions your children will receive their inheritance by placing funds in a trust under the control of a trustee. You can combine a trust with a will and other legal tools to create a tailored plan that protects your family members and the assets you leave them.

Update All Beneficiary Forms

Many important assets, such as IRAs, 401ks and other insurance policies, have designated beneficiaries. Review this information to ensure it is still consistent with your wishes. Assets with beneficiaries will pass outside of probate. With that said, check your beneficiary designations every few years to verify that they reflect your current wishes.

Review and Obtain Any Life Insurance

If you do not yet have life insurance, you may want to purchase a policy to take care of your loved ones. Updating your beneficiaries on any existing policies ensures the right person will be able to claim benefits when you pass away. Every estate plan should take life insurance into consideration. It can provide your loved ones with financial support and liquidity to pay any death taxes. In addition, if you own your own business it can be used to fund your Buy-Sell agreement or retirement plans.

Review the Current State And Federal Estate Tax

Depending on the size of your estate, your heirs could be required to pay a significant amount in taxes if your will goes through probate. You can take advantage of some legal tools to safeguard your assets for the benefit of your beneficiaries. Tax laws can change at any time, so be sure to review and plan accordingly.
Plan for Funeral Expenses
Put money aside to save loved ones the burden of financing your funeral. Consider a prepayment plan or special account at your bank that is payable on death. Your lawyer or financial adviser can help you decide what works for you.
Make Your Final Arrangements
Specify before you pass on if you would like to be an organ donor or gift your remains to medical science. Have a family meeting. Let loved ones know whether you would like to be buried or cremated. It is not uncommon to specify where you would like your final resting place to be and what type of funeral and/or memorial service you would like to have. Some people even pick out the music and pictures they want to be displayed. This does not need to be specified in a rigid legal document. You can make your wishes know in a hand-written letter and include it in your estate planning binder.
If You Own a Business, Create A Succession Plan
Your business may be the primary source of your income. Consider a plan that ensures an easy transition to the next generation while giving you income in retirement. Explore different legal options to protect your heirs and your business in the event of your passing. This can include entering into a buy-sell agreement, moving your business into your trust, or simply creating an exit strategy with a trusted employee.
Organize and Store Important Documents
Keep all important documents, such as your will, insurance policies, real estate deeds, trusts, funeral arrangement plans, stock certificates, and debt information in one place. Tell your executor where to find this information to make it easier to organize your estate after your passing. At our law firm, we provide clients with a “Life Organizer” which is a binder with tabs for all important documents. Additionally, it is a good idea to have a scanned copy of all documents stored on a secure server.

Verify All Property Is Titled Correctly

Make sure the title to your home and other real estate assets are in the right names. The title can affect what property is transferred through the right of survivorship and what becomes part of your estate. You can take legal steps to attempt to change property title if necessary.
Notify Family Members of Where You Keep Your Estate Planning Documents
One common misconception people have is that there is some estate planning document repository where your documents are on record. The truth is that you may have the only copy of your documents. If you don’t give a copy to your agents or beneficiaries, or let them know where you store your documents, there is a strong chance that the documents will not be found. Important documents, such as powers of attorney and health care directives, may be required even before your passing. Make things easier on your loved ones by disclosing where important legal documents are kept.
If You Have a Trust, Verify That It Is Fully Funded
A living trust is one way to preserve assets for loved ones, but only if the trust has ownership of those assets. Funding a trust means transferring assets into it or naming the trust to be the beneficiary of an asset after your passing. Similarly, a testamentary trust is funded by placing assets in a trust at the time of your death through a provision in your will. It is best practice to revisit your assets every year and make sure they everything that should be in the trust has been transferred there.
Make a List Of Any Money Owed To You
Simply making a list of all money that is owed to you and putting it with your estate planning documents is a step in the right direction. It is also a good idea to include a copy of any promissory notes or agreements that specify who owes you money and on what terms.
Make a List Of Any Outstanding Debts
Your executor and trustee will have to take care of debts held in your name. Make a list of any debts connected to your assets, such as car loans and mortgages. Itemize open accounts like lines of credit or credit cards and any other debts such as state or federal taxes. Your executor and trustee should pay off all debts prior to distributing any assets so that your beneficiaries do not have to worry about any future claims.
Create a Personal Property Memorandum
To leave certain items such as family heirlooms to specific people, make a list with a designated beneficiary attached to each object. This is called a personal property memorandum and can be attached to your will or trust. It is important to work with an attorney to verify that your written wishes will be upheld.
Cover Estate Planning Basics
A comprehensive estate plan should consider what happens in the event of both death and disability. It should take into consideration what you want to happen to your property upon your death, the financial well-being of your family, the degree to which probate can be avoided, and how to eliminate or minimize estate taxes. These goals can be accomplished through various means, including properly setting up ownership of assets, designating beneficiaries where possible, and executing one or more estate planning forms. In addition to financial matters, an estate planning checklist should also consider the guardianship of any minor children, and medical treatment planning.

Plan Your Asset Ownership
Any asset that has title documents (real estate, motor vehicles, etc.) can be set up so that upon your death the title automatically passes to a co-owner. Most often this is a spouse. The title document must clearly indicate that ownership is held as joint tenants with rights of survivorship, as tenants by the entireties, or as community property. There are two potential downsides to adding someone as a joint owner. First, you will need the joint owner to agree to any sale of, or loan secured by, the property. Second, if the value of the property exceeds a certain amount, it could trigger the federal gift tax.
Cover Your Debts with Insurance
One way to ensure that all of your debts (including burial expenses) are paid in the event of death or disability, and that your loved ones are provided for, is through auto, homeowners, disability, and life insurance.
Get a Last Will and Testament
A last will and testament takes care of any property that must be probated. A last will can also deal with the care of any minor children (or adult children with disabilities). You designate who will get any property that hasn’t been handled through joint ownership or a beneficiary designation, appoint someone you trust as the executor of your estate, and appoint someone you trust to be the guardian or conservator of your minor or disabled children.
Consider a Living Trust
Especially if you have a large estate, or many beneficiaries, a living trust is usually the best choice for handling distribution of property, avoiding probate, and minimizing estate taxes. To avoid probate, most people create a revocable living trust (“revocable” since you may revoke the trust at any time). Property title is transferred from you to the living trust, and you become the trustee. While you are still alive, you control the property. You manage the property the same as if it was still in your name (sell or mortgage it, for example), and may acquire more property and add it to the trust. Upon death, a person you appoint as your successor trustee assures that the property is transferred to those you designate as trust beneficiaries. This transfer does not require probate. The successor trustee would also manage the trust if you become mentally incapacitated. People sometimes create an irrevocable living trust (most often for Medicaid planning), which also avoids probate, but requires the person creating it to give up the right to revoke it.
Consider a Health Care Power of Attorney
A health care power of attorney designates someone you trust to make decisions regarding your health care in the event you are mentally or physically unable to make decisions for yourself. You should discuss your desires for medical treatment with your health care agent (sometimes called a surrogate).
Get a Living Will
A living will, also known as an advance directive, sets forth your wishes regarding what types of life-prolonging medical treatment you do, or do not, want in the event you become terminally ill or injured and are unable to communicate your wishes. A living will goes along with a health care power of attorney, as it can serve as a guide to your agent, or can express your wishes in the event your agent is unavailable at a crucial moment.
Leave Information for Executor and Statement of Desires
This is not a legally binding document, but gives valuable information and guidance to your executor. It should include the information needed to clearly identify and locate all of your financial accounts, insurance policies, credit cards, vehicle loans, and mortgages. It should include contact information for relatives and close friends to be notified of your death; where assets are located (safe deposit boxes, storage units, etc.); and instructions regarding your desires for burial, cremation, funeral ceremonies, organ donation, etc.
• Identify your goals for creating an estate plan: Different people have different reasons for making an estate plan. Some of the most common reasons include the following:
• To ensure minor children are cared for if parents die before the children become adults
• To ensure pets are cared for and financially provided for if something happens to their owners
• To ensure that surviving family members are financially taken care of in the event of a death
• To ensure a family business remains operational and within the family after a death
• To control what happens to assets after a death occurs
• To protect wealth, including a family business or other assets
• To prepare for incapacity by providing instructions for medical care and specifying who should make decisions and manage the affairs of the incapacitated person
• To make a plan for charitable giving
• To make a plan to facilitate the timely and cost-effective transfer of assets outside of the probate process
• To reduce or avoid estate tax on a larger estate
• To take more control over what happens to an inheritance, such as ensuring money is used only to pay for a college education or ensuring money doesn’t go to a child until after his or her 21st birthday
• To provide for a disabled loved one who is receiving government benefits that could be lost due to an inheritance, or to provide for a disabled loved one who cannot manage an inheritance independently
• List the assets you want to include: One of the key reasons for creating an estate plan is to make sure your assets are easily transferred to the new owners you’ve designated. You’ll need to know exactly what assets you want to include in your estate plan. This will not only help to ensure that you have appropriate plans in place to transfer all of your wealth, but also help your family members see exactly what you own so that nothing falls through the cracks.
Some of the assets you’ll want to address in your estate plan include:
• Real estate you own
• Vehicles you own
• Your ownership interest in a business and its assets
• Intellectual property you own, such as valuable patents or a monetized social media account
• Investment accounts
• Personal property including jewelry, books, art, and furniture
• Life insurance policies
• Identify the risks to your assets and make plans to protect them
Some of the risks you may need to think about include:
• Losses due to claims against your business:
• Losses due to nursing home costs
• Losses due to Medicaid estate recovery
• Losses due to creditor claims
• Identify the loved ones you want to provide for and protect
• Decide whether you want to make charitable contributions
• Determine whether your potential heirs or beneficiaries have any special needs
• Determine whether you’ll owe estate tax
• Decide whether avoiding probate is one of your goals
• Think about what will happen if you become incapacitated
• Make sure you have the right insurance policies:
• Determine what legal tools you’ll need
• Implement your plan.

Will Estate Planning Checklist Free Consultation

When you need help from an attorney for an estate plan; whether it is a last will and testament; a durable power of attorney, revocable living trust, or health care directive, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.