Essential Estate Planning Checklist

No matter how much or how little you may have, creating an estate plan can be daunting. Between the logistical challenges of gathering account information, the seemingly endless choices of estate planning instruments, and the existential discomfort of considering your own death, it’s understandable to want to avoid creating your estate plan. However, having an essential estate planning checklist can simplify the process. Here’s a closer look.

The best way to ensure your estate plan meets your needs is to work with an estate planning lawyer. However, understanding common estate planning documents and having a checklist can help you begin the process.

What Documents Make Up an Estate Plan?

Your Estate Plan Is More Than Just a Will

Before diving into your estate planning checklist, it’s wise to familiarize yourself with some of the most common estate planning tools.

A Will

Regardless of the simplicity or complexity of your estate plan, your last will and testament is a critical component. Many people mistakenly believe that a will is only for explaining who should receive your assets after your death. This is important, but your will can serve several other key purposes as well:

• Selecting a guardian for your minor children
• Selecting a guardian for your pets
• Choosing an executor (or personal representative) for your estate
• Outlining your funeral and burial preferences
• Gifting specific pieces of property to specific people.

In most cases, your will is just the beginning of your estate plan.

A Trust

A trust is a legal document allowing a particular entity to hold assets on your behalf. Depending on the particular type, a trust may help minimize taxes, shield your assets from creditors, or simplify the process of asset distribution.

One type of trust that plays a critical role in many estate plans is the revocable living trust. A revocable living trust can be changed throughout your lifetime, and its primary purpose is to prevent your assets from having to go through the process of probate.

Powers of Attorney

In many cases, it’s wise to designate a power of attorney to manage your affairs in the event you are temporarily incapacitated. There are many different types of power of attorney — these are some of the most common:

• Healthcare Power of Attorney: Allows medical decisions to be made on your behalf
• Financial Power of Attorney: Allows someone to manage your finances
• General Power of Attorney: Allows someone to handle your general affairs.

When you designate a power of attorney, you may make its scope as broad or as narrow as you like. You may grant all types of power of attorney to the same person If there is someone you trust enough to handle your medical, financial, and general affairs. Alternatively, you may designate a different person to manage each area.

Because a power of attorney is such an important document, it’s often best to name backup personal representatives in case the people you choose are unable or unwilling to help.

A Living Will

A living will is much different from a last will and testament. A living will — also called an advance directive — details your wishes for medical care in case you cannot communicate your preferences. Living wills often include your preferences regarding these types of treatments:

• CPR
• Being placed on a mechanical ventilator
• Tube feeding
• Use of antivirals and antibiotics when close to death
• Palliative care.

Creating a living will isn’t something you should rush. It’s often wise to consult with a trusted physician to ensure you fully understand what each type of treatment entails.

Creating Your Estate Plan: A Checklist

Once you have a general working knowledge of the types of documents you may wish to include in your estate plan, you can start working on your estate planning checklist:

Start by Taking Inventory

This initial step can be tedious. However, for your estate plan to be effective, it must include all of your property and its value. Make sure you include the following in your inventory:

• Real Estate: Your home and any other pieces of real property
• Physical Assets: Jewelry, musical instruments, artwork, vehicles, and other items of value
• Financial Statements: Statements from bank, investment, and retirement accounts
• Cryptocurrency: Any crypto holdings you may have
• Insurance Policies: Your life insurance and other insurance policies.

Taking stock of your assets is important, but so is listing your liabilities. These may include car loans, mortgages, credit cards, and other loans or lines of credit.

Estate planning can be overwhelming, but you don’t have to create your estate plan alone. Call us at (251) 444-7000 today to get started.

Ask the Important Questions

An estate planning attorney will be able to help you get started on your estate plan itself. Before your first meeting, you can prepare yourself by answering the following questions:

• Who do you want to handle your finances and other affairs if you’re unable to?
• How much money do you need to set aside for your children’s care if you die before they turn 18?
• If your children are minors when you die, who do you want to serve as their guardian?
• If you have pets when you die, who do you want to care for them?
• Who do you want to inherit your assets?
• Who do you want to be responsible for distributing your assets?

You may write down the answers to these questions if you’d like, but you don’t have to. Simply having considered them before your initial meeting will help streamline the estate planning process.

Meet With an Estate Planning Attorney

Next, it’s time to schedule a consultation with an estate planning lawyer. Depending on the size and complexity of your estate, this initial meeting might just be a conversation about your assets, your goals, and which estate planning tools are appropriate.

At this meeting or a subsequent one, your estate planning attorney will draft the documents you need. In Alabama, many estate planning documents must be notarized to be legally valid, so your lawyer will also help you through this process.

Before your initial meeting, your attorney will likely give you a checklist of documents to bring. Make sure you take the time to gather each one. Otherwise, it may be difficult for your lawyer to get a complete picture of your assets.

Put Your Estate Plan Into Action

Not all estate planning tools require follow-up on your part. For instance, once you’ve created a will, you don’t generally have to take further actions. If your estate plan includes one or more trusts, changes to your account beneficiaries, or both, you might need to do the following:

• Fund any trusts you open.
• Re-title any assets that you’re transferring to a trust.
• Ensure all beneficiary designations are up to date.

If you’re updating an estate plan, make sure your loved ones are aware of the update. For instance, if you keep a copy of your will in a safe at home, make sure you replace it with your updated will.

Regularly Review and Update Your Plan

Your estate plan is meant to evolve with you. Unfortunately, many people create an estate plan and then neglect to update it. That might not sound like a major issue, but it has the potential to cause significant problems.

For example, suppose that you create your estate plan after marrying your first spouse. Eventually, you divorce, remarry, and update your will — but you forget to update your beneficiary designations on your life insurance policy and retirement accounts.

Beneficiary designations on specific policies almost always supersede a will. This means that if you die without updating your beneficiary designations, your ex-spouse (not your current spouse) will likely be legally entitled to your life insurance death benefit as well as your retirement accounts.

Reviewing and updating your estate plan is essential, but how often do you need to do it? We usually suggest that our clients update their estate plans each time they hit a key life milestone like one of the following:

• Buying or selling a home or business
• Getting married or divorced
• Having children
• Having grandchildren (if you want to leave assets to a grandchild)
• Death of a spouse
• Receiving an inheritance or major financial windfall.

It’s possible to go for many years between milestones like these. If it has been a few years since you last reviewed your estate plan, it’s not a bad idea to take a look at it anyway and make changes if needed.

Ready to Create Your Estate Plan or Update an Existing One?

Let Us Help You Protect Your Legacy

There are countless reasons people put off estate planning. They might be overwhelmed by the prospect or think they don’t have sufficient assets to need an estate plan. However, you’re never too old, young, rich, or poor to have an estate plan — and the Southern Estate Lawyers team is ready to help you create one. We have decades of experience helping Alabama individuals and families safeguard their assets and discover new peace of mind.

If you’re ready to start building your estate plan or updating your existing one, call us at (251) 444-7000 to book a consultation.