Estate Planning Checklist - Are You Prepared?

Chris Maurer |

Putting off estate planning is common. When work, family, and other matters are at top of mind, thinking about a time when you have passed on or can’t manage your affairs is often pushed aside. In fact, a recent survey reveals that just 60% of Americans over age 55 have created estate planning documents, while less than 23% of those ages 35 to 54 have done the same. If you haven’t created an estate planning checklist, review the steps below to help get you started.  

Choose an Executor

The executor of your estate is charged with managing the distribution of your assets. This person doesn’t need to be a lawyer, and you can change the executor at any time. However, it’s a good idea to introduce your estate planning attorney to your executor. 

Be honest with your executor about the challenges of this role. Settling an estate is rarely a quick process, and they may be required to make complex decisions and attend in-person meetings related to their duties for months or even years. 

Decide How Assets Will Be Inherited 

If you haven’t yet, finalize your will with an estate planning attorney immediately. Doing so ensures your decisions about asset distribution are up-to-date and clearly stated in the highly specific language these documents require. 

There are several ways to manage assets after your death, including direct inheritance and setting up trusts. Trusts can be a preferred option for many families, as they help protect assets from creditors, provide for the care of a disabled loved one, and shield your assets from the costs of long-term care and extended medical treatment. 

If you choose to establish a trust, you can determine whether heirs will inherit assets or receive funds generated by the sale of non-monetary assets. You should also be aware that while beneficiaries won’t pay taxes on the principal of a trust, they are responsible for any taxes due on any additional income or earnings. 

Choose a Financial Power of Attorney

When you are unable to make decisions about financial matters, a financial power of attorney is authorized to do so on your behalf. Like an executor, this person does not need to be a financial professional. However, it is wise to choose someone who understands investments and finance. They may need to make decisions about how to use savings and investments to pay for care or update your investment strategy to reflect changing needs. 

Most people designate a spouse or partner as their primary financial power of attorney and a child or trusted individual as an alternate. No matter who you choose, you should give the person a clear picture of your assets, debts, and any other complicating factors. 

Provide Directives for Healthcare

Your estate plans should also include guidance for healthcare in the event of serious illness or injury. These documents include: 

Health Care Proxy

Your healthcare proxy allows a trusted individual to make medical decisions when you are unable to do so due to injury or illness. 

Living Will

Most of us have strong feelings about the care we receive, from nursing homes and assisted living to the interventions taken to preserve life. A living will makes clear your preferences for treatment and long-term care, as well as life-sustaining procedures. 

Medical Orders for Life-Sustaining Treatment (MOLST)

This document is signed by your physician and determines treatment for individuals diagnosed with advanced diseases who may soon pass away. The document can be created at the time of diagnosis or even earlier and will only take effect once you face a life-threatening illness. 

Communicate with Loved Ones

Talking about end-of-life decisions is difficult. It’s natural for loved ones to feel upset by these conversations. However, this only makes estate planning and such talks more important. Having a well-defined estate plan avoids confusion and additional upset when these documents are needed most. Further, understanding your estate plan can help prevent disputes, hard feelings, and other negative outcomes at the time of its implementation. 

Your heirs should be aware of your executor, financial power of attorney, and the person authorized by your healthcare proxy, as well as important documents and plans. These could include: 

  • Life insurance and long-term care policies
  • Healthcare and financial proxy documents
  • Financial statements
  • Interment agreements and funeral planning documents
  • Business ownership documents
  • Titles, deeds, tax returns, and other records
  • Credit card numbers
  • Log-in information for online accounts
  • Contact information for doctors, attorneys, financial professionals, and others

Finally, be open about the inheritance heirs will receive. They may have inflated ideas of how much they stand to inherit, and this misinformation could lead to a host of complications. Talk through your decisions and prepare heirs for what they may realistically expect. 

Consult with an Estate Planning Attorney Today

Estate planning is one of the best ways to ensure your end-of-life wishes are followed and avoid uncertainty for loved ones. If you have questions about estate planning or aren’t sure where to start, contact Park Place Financial today. Our in-house specialist can help you create a comprehensive plan that protects your assets, honors your wishes, and provides for your loved ones in the future.