Estate Planning: Checklist Of The Basics

No one likes to think about their own death. It is the one topic we are biologically engineered to push back against. Which is why so many people do absolutely no estate planning until it is urgent. When they are terminally ill or in an accident, suddenly they can see that they should have done their estate planning long before.

The one universal truth is that everyone dies, yet it is tough to internalize that. When you sit down to write a will or do any other kind of estate planning, you are acknowledging that fact. It is way more difficult than just signing a piece of paper.

Still, without estate planning, your estate will go into probate when you die. Your loved ones will struggle to make sense of your financial situation while dealing with their grief. For their sake, and for your own peace of mind, estate planning as soon as possible is ideal.

But how do you start estate planning? To help you out, here is a checklist of the basics you need to get done.

1.List everything you own

In order to do proper estate planning, you need to know what you have and what you owe. You may be able to get your account balance easily enough, but that does not include all your physical possessions or even your non-physical assets. Start your estate planning by creating a spreadsheet.

One page of your spreadsheet should be dedicated to all of the material possessions you own. Go through your home and put everything you come across into the spreadsheet.

Another page should be dedicated to your non-physical assets. These include things like retirement plans and life insurance policies. You should include all your other insurance policies as well.

2.List everything you owe

Just about everyone owes money in some form, whether as credit card debt or a long-term mortgage. Add a page to your spreadsheet and list everything you owe to anyone, whether they are an individual or company. Include any credit cards on which you have a zero balance but are still open.

3.List any memberships

Any associations you are part of may have benefits that your loved ones can collect when you die. List your memberships, including organisations like AARP, veterans associations, and professional accreditation associations.

4.List your charitable contributions

You can use the same page as the one with your memberships list to include any charities you support. This will help your loved ones if they want to continue donating on your behalf.

5.Assess your retirement accounts

Most people do not think about their 401(k) or other IRA very often. Once they have started working and have a retirement plan in place, they simply leave it be. However, your financial needs change over the years, and the kind of account and contributions that suited you at the start of your career may no longer be suitable. Assess your retirement accounts to decide whether they need an update.

6.Assess your life insurance

Do the same with your life insurance policy. What once seemed perfect for your loved ones may no longer be enough, especially if you have had children or started looking after an elderly parent.

7.Transfer on death designations

Most assets and policies go through probate when you die and are distributed by court instruction. This may make life hard on your family immediately after your death. By assigning transfer on death designations on accounts like bank accounts and investment accounts, you can ensure they get funds as soon as possible without waiting for them to go through probate.

8.Choose an estate administrator

Choosing someone to administer your estate is tough but important. Without choosing an estate administrator, your loved ones may get into conflict over who will take care of it. Your instinct may be to choose your spouse if you are married, but consider that they will be going through a lot, and will also struggle to remain impartial. Try and find the balance by choosing someone without stakes and who will be best-suited to get things done.

9.Write a will

Wills are easy to get done. You can use an online will maker if you don’t want to splash out on an attorney. Everyone should have a will, as it gives all the instructions for what to do when you die. It will save your family a lot of confusion and grief.

10.Print and sign your lists

Print and sign at least 3 copies of your lists. One should go to your partner or another loved one and be placed in a safe deposit box. Another should go to your estate administrator. The last one you should keep for yourself. It is also worthwhile to send your lists via email to your estate administrator.

11.Update your lists

You should update your lists at least once every two years, as your assets and debts can change a lot in that time. Some people have the capability to update their lists as their circumstances change, but most people prefer not to think about their estate except when absolutely necessary.

12.Set up power of attorney

Finally, power of attorney is a related document you should complete. You will write one for financial purposes and one for health purposes. They assign who you want to take care of your decisions if you are incapacitated.

The above should get your estate planning started. Go through the checklist and remember to update your lists regularly.

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