Estate Planning Checklist: Create An Estate Plan

Estate planning checklist

Although it can be an emotional process to craft an estate plan, it is key to a smooth transition for your family. You can make the process easier by following our helpful estate planning checklist.

An estate plan can be designed to take care of your family if something happened to you. With a carefully drafted set of estate plan documents, you can ensure that your wishes are carried out after your passing or incapacitation. Let’s take a closer look at a helpful estate planning checklist that can walk you through the process.

What is an estate plan?

An estate plan is a way to plan for who will receive any assets or deal with your responsibilities after you pass, or can no longer manage your own affairs.

At the most basic level, your estate plan will designate beneficiaries of your assets. If you delve more deeply into this plan, you can look for ways to pass on your assets in a way that minimizes the tax burden for your heirs (inheritance tax).

Why is an estate plan important?

As you consider drafting estate plan documents, you might be tempted to put off this task. After all, it can be uncomfortable to think about your family’s life after you are gone. But without an estate plan in place, you could leave your family in a difficult financial situation.

Estates without a clear plan can often be pulled into the state probate process which allows the courts to decide how your assets are distributed. The probate process can freeze your assets while the case makes its way through the court.

Even without the lengthy probate process, leaving your heirs without a plan can be an emotional burden for them.

Instead of focusing on the grieving process, they’ll be stuck attempting to sort out your assets among themselves. It is easy to see how that could lead to issues.

Finally, an estate plan can ensure that your assets are distributed to your liking. You likely have an idea in mind about who should receive your assets. Take the time to include your wishes in an estate plan so that your family doesn’t have to guess.

Estate planning checklist

Now that you understand the importance of estate planning, let’s walk through an estate planning checklist.

1. Think about the legacy you want to leave

First, let’s recognize that estate planning can be an emotional process. Before you start the paperwork, take some time to get more comfortable with the idea. Remember, the goal is to protect your family’s future. With that in mind, you can start moving forward.

A good place to start is to simply think about the legacy you want to leave behind. Once you have an idea of where you want your assets to go, you’ll be able to navigate the estate planning checklist with less confusion.

2. Take stock of the assets you have

Taking an inventory of what you have is an important step in the estate planning checklist. After all, you can’t create a plan for your assets if you don’t know what your assets are. You can make a list of your tangible and intangible assets.

Tangible assets aka physical assets such as your home, car, collectibles, and more. Intangible assets include less obvious things such as your checking account, life insurance policy, retirement plans, business interests, and more.

Of course, the list of assets you amass will be a unique reflection of your personal finances. Make sure to think through all of your valuables when creating this list.

3. Anticipate what your family will need

If you were gone tomorrow, what would your family need? Without you to provide for them, your family’s finances could look very different. Consider whether or not your current assets would cover their financial needs.

You might find a gap between what your family needs and your current assets. If you run into that issue, then consider a life insurance policy.

You can obtain a life insurance policy that would pay out a death benefit to your family in the worst-case scenario.

4. Consider the needs of your children

Beyond the financial needs of your family, you’ll need to make additional plans for young children. Importantly, you should name a guardian.

Take the time to discuss your intentions with the named guardian. You should also draft a document that outlines any specifics you want your child’s guardian to include in their lives.

5. Draft directives 

A crucial step in the estate planning checklist is to draft your directives. Directives are legal documents that outline your wishes for a variety of potential scenarios. Here are a few that you should consider including in your estate plan:

A medical care directive

If you are medically unable to make decisions for yourself, a medical care directive places the power to make medical decisions for you in the hands of a trusted person.

A durable financial power of attorney

If you are medically unable to conduct your financial affairs, this document grants that power to a trusted person aka designated agent. When the agent is designated, that person can handle your financial and legal affairs.

A limited power of attorney

A limited power of attorney allows someone to act for you in a limited number of ways. For example, you could grant the limited power of attorney to someone to manage your home closing process. With this option, you retain more power over your own affairs.

As you create these directives, think carefully before granting this power. When these documents are put into effect, the individual in question will have a significant amount of power over your finances and your life.

Take the time to ensure you are selecting a person that you can truly trust to keep your best interests in mind.

6. Update your beneficiaries

Updating your beneficiaries is an easy step in your estate planning checklist. But many overlook this.

Take the time to check the details of all of your retirement accounts, insurance policies, and bank accounts. You’ll see a place to designate a beneficiary. Make sure to include the right beneficiary!

When it comes to your physical belongings, make a specific list about who will receive your things. The more specific you can be, the better.

Don’t forget to update your beneficiaries regularly as you move through life. You should update your beneficiaries to reflect your current situation in life. For example, updating your beneficiaries after a divorce should be done quickly to ensure that your assets end up where you want them to.

7. Talk to an attorney

If you have a complicated financial or family situation, then an attorney can help you make your wishes clear through proper documentation.

Don’t be afraid to discuss your situation with an estate planning attorney. They can offer clear guidance for your unique situation.

The bottom line: An estate planning checklist is worth it!

Running through an estate planning checklist may not be the easiest task. But it can help to secure your family’s financial future after you are gone. Take some time to ensure that your estate plan is ready today!

Scroll to Top