The Estate Planning Checklist You Didn’t Know You Needed

You might feel as though you don’t need to plan your estate yet

However, this is one step in your financial strategy that you don’t want to put off. Many feel hesitant because, similarly to life insurance, estate planning implies planning for the end of your life. Instead, try to think of it as a way to protect your family from undue stress if the unexpected were to happen. 

Estate planning doesn’t have to be a stressful process. We’ve put together a checklist to help you get started.

1. Identify Your Goals

Planning your estate can have a multitude of goals. You may want to protect loved ones, your business, your assets, or even charities. To identify your goals, consider what would happen if you were suddenly without the ability to make decisions or you were to pass away unexpectedly. How would you want your affairs to be handled? Asking yourself this question will help you determine what to do along the way. 

2. Check Your State’s Estate Tax Laws

Though most will not pay federal estate or inheritance taxes—unless you inherit $11.7 million or more (as of 2021)—you could be subject to state taxes. Become familiar with your state’s tax laws to determine the best ways to minimize your estate’s tax liability. This step is especially important if your goal is to protect your heirs, as they would be paying the state tax on the money they received. 

3. Take Inventory of Your Most Valuable Items

Before you really dive into planning your estate, you’ll want to have a good understanding of what types of assets you own and how much they’re worth. In fact, you may have more in assets than you think once you begin making your list. Make sure that you list both tangible (e.g., cars, homes, collectibles, etc.) and intangible (e.g., retirement accounts, investments, savings, etc.) assets. When you’re finished, estimate each item’s value as closely as possible. 

4. Review Your Insurance Coverage

This is a great time to review your insurance coverage, keeping in mind that policies such as life insurance and annuities will pass along to your beneficiaries. When you consider the goal of your estate plan, you may decide to increase or change your insurance coverage accordingly. 

5. Run a Credit Report and Make Note of Debts

It’s recommended that you run a full credit report every year to monitor your credit and debt. While planning your estate, you can use your credit report to make a comprehensive list of all of your debt that may affect your plan or its goals. 

6. Review Your Retirement Accounts 

Though your retirement account should be on your list of intangible assets (see number two on this list), this is a good time to review your beneficiaries. Ensure that in the event of your death that your funds would be given to their intended recipient. A lot can change from year to year, so it’s important to review your beneficiaries on all accounts at least once a year. 

7. Choose an Administrator

You’ll want to choose an administrator or executor of your estate who will ensure that your wishes are carried out correctly. This should be a person that you trust and who is responsible and of sound mind. Like your beneficiaries, your executor might change down the line.

8. Build Necessary Documentation

You will need multiple documents to support your estate plan, such as a will, a living will, a power of attorney, and a healthcare proxy. These are all in place so that your plans are in writing and that it’s clear what your wishes are if you aren’t able to make decisions for yourself or you pass away.

9. Set a Schedule to Revisit Your Plan 

As we’ve mentioned in nearly every point of this checklist, it’s crucial that you review your estate plan on an annual basis so that you are always aware of the details. Pay close attention to your beneficiaries. Also, remember the goals we set at the beginning? Refer back to those goals during your plan reviews to ensure that you’re staying true to those goals, or to see if your goals might have changed.

10. Communicate Your Plan with Family

Making your plans clear with your loved ones can alleviate future tensions. If you can talk through your expectations now, it leaves less room for confusion and stress down the road.

11. Consider Hiring an Estate Planning Professional

A lot goes into estate planning, particularly if you want to be sure that all of your bases are covered. Consider enlisting the help of a professional. Having an ally on your side can make this process much easier with less hassle.

Got estate planning questions?

Southwestern Investment Group’s advisors can help you build the estate plan to meet your financial goals. Contact us today to schedule a consultation.

Legal Disclaimer

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