Your Comprehensive Estate Planning Checklist

You have worked hard to build your estate and the results show your efforts were successful. It is equally important that you also work hard to preserve your estate and pass it on to your heirs intact.

To assist you in this important task of transferring your estate to your desired heirs, we have constructed a comprehensive estate planning checklist which you can use to ensure you have covered all the important aspects of estate planning.

Checklist For Wills

Let’s begin with the basics. If you have not yet created a will, it’s time to do so immediately.

Actually, all American citizens have a will, even if they did not go to an attorney and formally prepared and signed a will. This is because every state has an intestacy law, which in effect creates a “default” will for each citizen of their state who dies intestate (without a will). The problem is that these state-created wills are quite broad and general in their terms and distribution of assets, meaning it’s highly unlikely that the state knows how you really want to transfer the assets of your estate to your heirs and other designees.

This is why we say if you do not yet have a will, now is the time to create it! While you are doing so, review the below checklist to ensure that you are covering every matter of concern to you as regards the transference of your estate.

  • Existing Will – first and foremost, you must have a will, as was emphasized above
  • Guardianship – if you have minor children, you must appoint a guardian to raise and care for them
  • Executors – executors are responsible for following the instructions of the will and distributing assets; ensure you select qualified individuals for this position
  • Trustees – while executors perform a one-time task (settling the estate and distributing assets), trustees usually have a longer term responsibility and should be selected based upon their experience and age (a trustee in their senior years may need to be replaced before the duties of the trustee have been completed)
  • Beneficiary Designations – by naming a beneficiary on certain assets (life insurance is a common asset with a beneficiary designation), they pass outside the will and avoid probate costs

Checklist for Trusts and Gifting

Some individuals create one or more trusts during their lifetime as part of their estate planning strategies, while others may have a trust created upon their death. Trusts can be excellent vehicles for transferring and managing estate assets, especially for minor children or adult children requiring special care and attention. If you have an estate of any size or have minor children, it is highly likely a trust will be involved, either now or in the future.

Another strategy often employed by those with sizable estates is annually gifting assets to selected heirs, which help to reduce or eliminate estate taxes upon the death of a wealthy individual.

The following trust and gifting checklist can help you make certain you covered all the important items involved in creating and operating a trust.

  • Living Trust – if you want to reduce probate costs, assets held in a living trust passes outside the probate procedure
  • QTIP – common in second marriages with children from the first marriage, you may want to limit your current spouse’s control over your estate assets, which can be accomplished through establishing a qualified terminable interest property (QTIP) trust in your will
  • Asset Titles – if you created a living trust, be sure you also change the title of your assets into the name of the trust; otherwise you have an empty trust
  • Charitable Trusts – if you have charitable interests and intentions, using a charitable trust can benefit you and your selected charities
  • Irrevocable Life Insurance Trust – when properly structured, this can prevent life insurance proceeds from being taxed in your estate
  • Annual Gift Tax Exclusion – each individual can gift up to $15,000 in cash or assets to another individual without paying a gift tax; this means a married couple can give as much as $30,000 tax-free per year to each of their children
  • Gifting Assets – when gifting assets to your children and other heirs, choose the following types of assets as gifts:
    • Appreciation Potential – gifting an asset with a strong appreciation potential is like gifting more than $30,000 per person per year
    • Low Cost Basis – you can avoid capital gains taxes by gifting assets with a low cost basis and high current value (the recipient’s cost basis becomes the value at the time of the gift, so they could sell it immediately without incurring any capital gains tax)
  • Family Business – establishing an annual gifting program of shares of your family business is a great way to slowly relinquish control and ownership to responsible adult children

General Estate Planning Checklist

Finally, we offer you a “catch-all” checklist of other estate planning items to which you should attend…

  • Annual Review – at the bare minimum, you should review your estate plan at least once yearly; if a major change occurs (new job, inheritance, investment success), such an event also calls for a full estate planning review and update
  • Management Succession Plan – if you operate your own business, you need a plan for its takeover, either at retirement or in the event of disability or death
  • Power of Attorney – you should plan for every contingency, including a case of disability which incapacitates you either temporarily or permanently; consider selecting a successor power of attorney in the event the first-named is unable to serve  
  • Life Insurance – for a nominal cost, life insurance can solve many problems (especially debt!) arising from an unforeseen death; making sure the proceeds are paid to the proper person or trust is as important as having the coverage in the first place
  • Disability/Long-Term Plans – while not as inexpensive as life insurance, having the proper coverage for early disability and senior care services is just as essential to your overall estate plan
  • Work With a Qualified Estate Planning Attorney – as you can see from the above three checklists, there are a lot of options and avenues to follow when it comes to proper and professional estate planning, which is why you need professional experienced support through the following stages:
    • Consultation – select an attorney who specializes in estate planning and will offer a free consultation so you can present your situation and make certain you will find the legal solution you are seeking 
    • Planning – once you find a qualified estate planning attorney, it’s time to lay out your current financial position, express your dreams and goals, and decide how to pass on your wealth in the way you want
    • Creation – after the planning session, a competent and experienced estate planning attorney will construct the best legal approach which will accomplish your stated goals and desires; this can include wills and trusts of different types (such as living, charitable remainder, or testamentary trusts)
    • Implementation – you, as the estate owner, should approval the final plan, after which your estate planning attorney will put everything into effect; this could include creating trusts and registering assets on top of documentation preparation and filing  
    • Oversight – a qualified estate planning attorney will also keep you on their calendar, ready to remind you each year that your estate plan is due for another review; through regular reviews, keeping prepared and current remains a task which is both simple and fast  

The best news is you are already in front of a team of highly-qualified, deeply-experienced estate planning attorneys with XYZ Law Firm, offering more than three decades of top-notch experience in estate planning, business, and real estate law. Contact us today for professional, dedicated attention to your legal needs as it concerns your business and the transferring of your valued assets to your loved ones in the best way possible.  

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