Estate Planning Basics: 7 Step Checklist

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Creating an estate plan can be daunting. There is so much to consider: taking stock of your assets, deciding who inherits what, choosing responsible people to carry out your wishes. But it doesn’t have to be complicated. Follow our 7-step checklist of basic estate planning. It will make things a lot smoother.

The Estate Planning Documents You Need

Before we get to the checklist, these are the basic estate planning documents you should have:

  • Will A Last Will and Testament spells out your last wishes. You can list assets you want to bequeath to beneficiaries of your choice. A Will also allows you to name a guardian for your minor children.
  • Revocable Trust – You can place assets in a Trust while you are living that will go directly to named beneficiaries when you pass. This can avoid the probate process.
  • Health Care Proxy & Living Will – With a Health Care Proxy – also known as a Power of Attorney for Health Care or a Medical Power of Attorney, you can name someone to make health care decisions if you become incapacitated and cannot make decisions, yourself. The supplementary Living Will allows you to express medical and health care choices you would want or not want if you become incapacitated and cannot make your own decisions.
  • Power of Attorney – You appoint a person who will manage your legal and financial matters if you are not capable of handling your affairs.
  • Pet Power of Attorney – Provides instructions and grants legal authority to a person you appoint to care for your pet if you become disabled, or just go away on vacation.
  • Pet Trust – Set aside funds to provide for your pet if they should outlive you. Appoint a permanent Caregiver for your pet, and name a Trustee and Protector to ensure your wishes are followed and your pet receives the best care after you’re gone. 

A comprehensive estate plan is more than just having a Will. Each legal document protects you, your assets, your choices, and your family (including your pet family members!). You don’t have to be wealthy to have an estate plan; in fact, everyone needs estate planning documents like a Will, Health Care Proxy, and Power of Attorney.

Also, as your life changes and certain events take place – such as divorce, having children, buying property, acquiring assets – you need to update your estate plan. Each document should be reviewed periodically.

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Estate Planning Checklist for 2021 and Beyond

Here is the 7-step checklist to help with your basic estate planning.

Assess your family's needs

Before setting out to create your estate plan, you should take stock of your financial assets and how to provide for your family after you are gone. The decisions you make now will have a long-term effect on your loved ones’ future.

Will your current assets be enough to cover their financial needs? If not, consider a life insurance policy.

What about your minor children? You could set up a Trust where you can specify how and when distributions are made, such as when they reach a certain age or complete college. You also should choose someone you trust who would serve as their guardian if something should happen to you and your spouse or if you are a single parent.

Itemize your assets

List everything you own, including all your tangible and intangible assets. Tangible assets include your home, properties, vehicles, valuables, and other personal possessions. Intangible assets are bank/financial accounts, stocks and bonds, retirement accounts/401 (k) plans, ownership of a business, and life insurance policies.

Determine the value of each. Gather the latest financial statements and have your property and valuables appraised.

Name your beneficiaries

Consider who you want to have your home, possessions, and money after you pass. Beneficiaries can be a charity or organization as well as your loved ones.

You should name successor beneficiaries in the event the primary beneficiary dies. Also, never leave a beneficiary section blank. When it is time to distribute your assets and there are no beneficiaries to receive them, the probate court will take control of the estate and decide who gets them.

Now is the time to review and update beneficiary designations on your life insurance and financial and retirement accounts. Perhaps someone listed has since died or is now an ex-spouse. Designations need to be kept current.

List your debts

Include all your credit card accounts that have balances, mortgages, home equity credit lines, personal/auto/business loans, and any other debt.

Safely keep all accounts numbers, contact information, and signed agreements in your Gentreo Digital Family Vault. Make sure you invite your loved ones to be members of your Gentreo Team so they know how to access this information when needed. Also, review your credit report annually. You may find old accounts you thought were closed are still open.

Appoint an Executor and Trustee

You need an Executor (also known as a Personal Representative) to take charge of your Will and/or a Trustee to oversee your Trust. The Executor ultimately settles your estate once the Will has finished probate. The Trustee manages the assets in the Trust and distributes them to beneficiaries. The people you choose should be trustworthy and have decision-making abilities.

Review Estate and Inheritance Taxes

Estates with assets exceeding $11.7 million will be subject to the federal IRS estate tax. This includes real estate, financial accounts, and cash. If you are transferring assets through your Will to beneficiaries upon your death, the taxes owed will be paid by the estate. If assets are bequeathed to your spouse, they are not subjected to the tax.

In addition to the federal estate tax, more than a dozen states have an estate tax. These states have lower exemption limits than the IRS. For example, in Massachusetts, an estate valued at $1 million or more would be taxed. 

Several states have inheritance taxes: Iowa, Nebraska, New Jersey, Maryland, Kentucky, and Pennsylvania. Beneficiaries inheriting assets of a certain value are taxed. As with the estate tax, surviving spouses are exempt from inheritance taxes. 

You can avoid or decrease any estate or inheritance tax by placing assets into a Trust, gifting, or making donations to charity. Careful planning can minimize the estate tax and maximize your beneficiaries’ inheritance.

Storing your documents

Once you complete your estate plan, you should store the documents online where you, your loved ones, and anyone you choose can access them when needed. The Gentreo Digital Vault is an example of a single, secure place that allows 24/7 access.

Create Your Estate Plan Now

Using the checklist will help you craft your documents. Don’t put off creating your estate plan. You never know when life will throw a curveball. Estate planning is all about being prepared for the expected and the unexpected.


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