Getting Started: An Estate Planning Checklist
Even if you don’t know the third week in October, 2021 is officially Estate Planning Awareness Week, it begs the question: How aware are you of your estate plan?
Have no fear, if your answer is, “I don’t know” or you plead the 5th and refuse to answer the question at all, Infinium is here to help. The vast majority of investors we encounter either have an outdated estate plan, or worst yet, have no plan at all. If you happen to fall into the ‘have no plan at all’ camp, you do have an estate plan and just don’t know it. Unfortunately, that plan is defined by the tax code for the state you live in. We can’t of one good reason to let a government entity decide what happens to you if you become incapacitated and can’t make decisions for yourself, or when you die, what happens to all of your possessions. Clearly, the best way to make sure your life
Create a will if you do not yet have one.
A valid will may save your heirs from some expensive headaches linked to probate and ambiguity even though it is usually not enough for a complete estate plan. A solid will drafted with the guidance of an estate planning attorney will likely cost you a bit more than a “will-in-a-box,” but sometimes the expense of getting it wrong can far outweigh the cost to get it right.
Complement your will with related documents.
Depending on your estate planning needs, this could include a trust (or multiple trusts), durable financial and medical powers of attorney, a living will, to name a few. More complex situations usually necessitate additional legal documents, but not always.
Review your beneficiary designations.
Who are the beneficiaries of your retirement plans and/or insurance policies? If you aren’t sure, it is probably a good idea to go back and check the documentation to verify (or change) who you have designated as beneficiary. History is littered with situations where a beneficiary is not named or updated, and parties find themselves in court to try and sort it out. The estate planning litigators don’t mind this, of course, but it’s clearly better to avoid a messy beneficiary circumstance through proper planning and updating.
Create asset and debt lists.
You should provide your heirs with an asset and debt “map” they can follow, so that they will be aware of the little details of your wealth. We assist clients in this items through our comprehensive financial planning process. Again, something is usually better than nothing, so if you don’t have a financial plan created yet, start by putting your inventory of assets and liabilities into a spreadsheet.
Think about consolidating your “stray” retirement and/or bank accounts.
This could make one of your lists a little shorter. Consolidation means fewer account statements, less paperwork for your heirs, and fewer administrative fees to bear.
Let your heirs know about the causes and charities that mean the most to you.
Write down the associations you belong to and the organizations you support. If you are fortunate enough to have a surplus, once of the best and most effective ways to make the world a better place through financial philanthropy.
Select a reliable executor.
That person should have copies of your will, power of attorney documents, health care proxy or living will, and any trusts you create. In fact, any of your loved ones referenced in these documents should also receive copies of them.
Delving into the great unknown of estate planning can be a daunting task indeed. You aren’t alone in this effort, however. Infinium is here to help you get this very important part of your financial well-being in order, so please do not hesitate to reach out and schedule a time for us to talk. Partnership is one of the best ways to accomplish big goals – divide and conquer if you will!
Mark is a +24 year financial advisor veteran and Certified Financial Planner™. He founded Infinium in 2009 to bring a more personal, and truly client-centric offering to investors.