07 Jan Estate Planning Checklist: What You Need To Cover

No matter who you are, what you do, or what assets you have, you need an estate plan. For the past 40 years, Phelps LaClair has been helping individuals plan for the inevitable. Everyone needs some degree of estate planning, and an estate plan can be tailored to the needs of every individual, but few people even know where to start. 

Estate planning can be a confusing and difficult journey if you’re not familiar with the ins and outs. It can be as daunting as being lost in a jungle without a map. To get your bearings as you begin planning your estate, you should have an understanding of estate planning basics, as well as everything you need to cover when planning your estate. 

The following estate planning checklist will help you make sure you have all of the estate planning must-haves, as well as the basics, under control. 

Estate Planning Checklist

1. Wills and Trusts

A will or a trust is one of the most basic necessities in every estate plan, even if you don’t have any substantial assets. A will can ensure your property is distributed according to your wishes and a trust can help to limit estate taxes or legal challenges. 

While having these documents is great, the wording of these documents is critical. Your will or trust should be consistent with the way you’ve bequeathed assets which pass outside of the will. For example, retirement accounts and insurance policies are assets that typically pass outside of your will to a named beneficiary. You shouldn’t name one relative, say, your sister as the beneficiary on one of these accounts and then bequeath the same asset to your cousin in your will. This can lead to a will contest or even a legal battle. 

2. Strong Power of Attorney

A power of attorney (POA) is a person who will act on your behalf when you can no longer do so yourself. Without a power of attorney, a court may decide what happens to your assets if you are no longer mentally competent, and in many cases the court’s decision may differ from your wishes.

Granting power of attorney to an individual in your life offers your agent the power to make legal decisions as if they were you. In many families, spouses will set up reciprocal powers of attorney. However, it can also be a good idea to have another family member, friend, or financially savvy, trusted advisor to act as your agent.

3. Letter of Intent

A letter of intent is a letter left to your executor or a beneficiary detailing what you want to be done with particular assets after your death. Some individuals also choose to provide funeral details or special requests in the letter of intent as well. A letter of intent can help to inform a probate judge of your intentions and can help in the distribution of assets in case the will is deemed invalid for any reason.

4. Beneficiary Designations

Some of your possessions can pass to your family members without being dictated in the will, such as 401(k) plan assets. This is why it is important to designate a beneficiary and a contingent beneficiary for accounts like those. Beyond 401(k) plan assets, insurance plans should also have a designated beneficiary and contingent beneficiary as they may also pass outside of a will. Without beneficiary designations, the distribution of these assets can be left up to a court, who may not make the same decisions you would have made.

5. Healthcare Power of Attorney

A Healthcare Power of Attorney (HCPA) will designate an individual, likely a family member, to make healthcare decisions on your behalf if you are unable to. When considering a HCPA, be sure to pick someone you trust. This person, quite literally, may hold your life in their hands. You should also identify a backup agent in case your primary agent is unavailable for any reason at the time they are needed. 

6. Guardianship Power of Attorney

If you have minor children or are considering having children, this is one of the most important, yet most emotionally difficult designations you will have to make in your will. You should choose a guardian who knows your children, shares your views, is willing to raise your children as you would, and is financially sound. 

This can be a difficult person to find, but it saves family members from a last-minute scramble decision of who will take your kids if you become incapacitated. Most importantly, it keeps them from entering the foster care system. It can also keep the courts from ruling that your children live with a family member you would not have chosen. 

Estate Planning Law Firm in Arizona

Estate planning extends far beyond a will or trust, and beyond the tasks on this checklist. While these are great places to start, they’re only the beginning. Estate planning is more than just deciding how to distribute your assets when you die. It is also about making sure your family members, as well as other beneficiaries, are provided for and have access to care and your assets after your death. 

At Phelps LaClair, we have decades of experience in estate planning for individuals in the Phoenix area. Our estate plans given thousands of families like yours peace of mind knowing that their future needs are taken care of. If you want to have this same confidence, call us today for a free, no-obligation consultation. Our staff is friendly and our fees are affordable. We will walk with you every step of the way as you navigate the estate planning basics.

Images used under creative commons license – commercial use (1/07/2021) Pexels