Five Step Check List for Your Estate Plan

What did Heath Ledger and former Supreme Court Justice Warren Burger have in common?  Their career choices couldn’t have been more different but in their estate planning, they made similar mistakes — ones that could have been easily avoided.  Heath Ledger made the mistake of not updating his will when his daughter was born and even though Warren Burger was a Supreme Court Justice, well versed in the law, he made the mistake of doing it himself and ended up leaving out some key provisions.  In both cases, the family paid the price.  If a Supreme Court Justice can make a mistake, anyone can.

Here is an estate planning to-do list that can give you a framework to look for what might be missing in your plan:

1)      Start with what you have.  Make some lists:

* Your valuable physical property – automobiles, furniture, jewelry, antiques, firearms, collectables, etc.

* Your investments – your home, investment property, retirement accounts, bank and brokerage accounts.

* Benefits – life insurance, employee benefits, Social Security information

* Debts – what you owe and who you owe it to

2)      What do you want to do with your property?

* Assign beneficiaries on your retirement accounts (double check they are correct!) and also possibly your brokerage and bank accounts as a “transfer on death” or “payable on death.”

*  Determine who you would like to leave your property, such as your heirloom jewelry, to and assign names to pieces – take photos of the items and include them with your documents.

3)      Consider what could go wrong.  This is often a missing step because truthfully, it isn’t pleasant to think about all the things that can go wrong. Before setting up your estate documents, take some time to  think about the financial situations and the personalities of your beneficiaries.  For example, do you have special considerations such as leaving a large amount of money to a beneficiary that would have a difficult time handling it?

One of our financial planners, Diane Winland, shared an example of some clients she’d worked with in handling their estate plan (in a former life before becoming a financial educator).  They loved their adult son dearly but were concerned about leaving him a large inheritance.  They set up their trust so their son would receive some funds monthly but also would receive an amount double what he earned on a 1099 or a W-2 at the end of the year – incentivizing him to work to ensure the trust would provide some support throughout his life.   He wasn’t happy about it and fought the trustee tooth and nail but the trust language prevailed.

4)      Put your estate plan in place.  Setting up your plans puts some teeth into it. Whether you go with a will or a trust, setting up the document makes it official so a probate court for a will or if needed (hopefully not) a court of law can uphold it.  Because estate planning is so complex, it makes sense for most people to work with an estate planning attorney .  Some resources on setting up a will if you want to do it yourself are Legacy Writer(TM)  and Nolo.  Check your employee benefits as many companies have a legal benefit or financial guidance either directly as an employee benefit, in a financial wellness program, or through your EAP.

5)      Don’t forget other important documents. Some other documents to put in place to help you now – not after you pass away – are financial powers of attorney so if you are sick and can’t sign, someone can take care of your financial matters for you and medical powers of attorney so someone can talk to your doctor and make medical decisions if you aren’t able to.  The living will is a separate document that deals with end of life issues – you’ll need that, also.  These documents need to be updated if you move to a different state. Click here for more information.

Estate planning requires some thought and a little attention to detail but once it’s set up, all it requires of you is to review it once a year or in the event you have a significant change such as the birth of a child. Otherwise, your family could be the one paying the price.


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