Estate Planning Checklist: Essential Steps to Protect Your Legacy

This comprehensive estate planning checklist breaks down every essential step to help protect your assets and ensure your family’s financial security, regardless of your wealth level.

Estate planning – not just for the wealthy

Estate planning isn’t just for millionaires or celebrities you read about in the news. Whether you own a home, have a retirement account, or simply want to ensure your wishes are honored, having a comprehensive estate planning checklist helps protect what matters most to you. Estate planning is about ensuring your assets go to whom you choose and providing security and clarity for your loved ones during your lifetime and after your death.

However, many people think estate planning is something they can handle on their own or put off until later. The reality is that effective estate planning involves both financial professionals and attorneys working together. Your financial advisor can help with the monetary aspects and coordination, while an attorney handles the legal documents that make your plan official.

This estate planning checklist covers everything you should consider, from what your financial advisor can help you set up to when you’ll need an attorney’s guidance. Think of this as your roadmap to protecting your legacy and ensuring your family is taken care of exactly as you intend.

 

1. Gather and organize your financial information

Before creating your estate plan, you need a clear picture of what you own and owe. This step often reveals surprises, such as accounts you may have forgotten about or assets you didn’t realize had grown significantly in value.

Start by listing all your assets. This includes obvious items like your home, car, and bank accounts, but don’t forget about retirement accounts, life insurance policies, valuable personal property, and even digital assets like cryptocurrency. Create a master document summarizing key information for your family and advisors to easily reference.

Next, identify all debts and obligations. Include your mortgage, credit cards, car loans, and any other debts. Don’t forget potential obligations like co-signed loans or business debts that might affect your estate.

Pay special attention to how your assets are titled. Some assets are owned jointly with rights of survivorship, while others are in your name alone. This distinction matters because it affects how these assets transfer after your death and whether they need to go through probate court.

2. Define your estate planning goals

Once you understand your current financial picture, the next step is clarifying what you want to achieve. Clear goals form the foundation of any effective estate plan. Without knowing what you want to accomplish, it’s impossible to choose the right strategies and legal structures.

Start by identifying your beneficiaries and understanding their unique needs. Do you have minor children who would need guardianship? Adult children who are financially responsible versus others who might benefit from receiving assets gradually over time? Maybe you have a special needs family member who requires ongoing care and could lose government benefits if they inherit assets directly.

Consider your timing preferences carefully. Some parents want their children to receive inheritances immediately upon reaching adulthood, while others prefer that assets be distributed gradually over many years. There’s no right or wrong answer. Your approach should depend on your family’s circumstances and your children’s maturity levels.

Don’t overlook charitable giving and legacy intentions. Many families find great satisfaction in supporting causes they care about through their estate plan. Creating a charitable legacy can also provide tax benefits while making a meaningful impact on organizations you value.

Business owners face unique estate planning challenges and need to think about business succession planning. Consider how ownership will transfer, whether family members want to continue running the company, or if it will need to be sold. Remember, your business’s future affects your estate’s value and your employees’ livelihoods.

Here’s something many people don’t consider: provisions for pets. While it might seem unusual, pets are family members, too, and planning for their care will bring you confidence that they will be ok, even after you’re gone.

 

3. Set up essential estate planning documents

After establishing your goals, you’ll need to formalize them through legal documents. You will need an attorney’s help with this part of the estate planning checklist. These legal documents form the backbone of your estate plan and must be properly drafted and executed according to your state’s laws.

During a recent Oak Harvest Financial Group webinar on the topic, attorney Tonya Knauth spoke about the importance of using an attorney to prepare these documents instead of downloading them from the internet. Knauth, who serves Texas families with wills and trusts, probate, and guardianship, says that tactic has backfired for several of her clients.

One such client “decided to create his own trust through LegalZoom. He created a trust agreement that wasn’t properly executed and was very unclear. He titled it incorrectly, with no help from an attorney and no help from a financial advisor. After two years of fighting… my client, the wife, had to pay part of that brokerage account to the kids from the previous marriage.”

The result, Knauth says was more than $50,000 in legal fees, a partial loss of assets, and emotional strain for her client.

Your will is probably the most familiar document, but it does more than distribute assets. It names guardians for minor children, designates an executor to handle your affairs, and provides instructions for asset distribution. Without a valid will, state law decides how your assets are distributed, which might not match your wishes.

You may also want to consider creating a trust. Trusts offer additional control and benefits that wills alone cannot provide. A revocable living trust helps avoid probate court, maintains privacy, and allows for more sophisticated distribution strategies. Irrevocable trusts can provide tax benefits and asset protection but require giving up some control over the assets.

And finally, you will want to appoint a financial power of attorney. Powers of attorney are crucial but often overlooked documents. A financial power of attorney grants someone authority to handle your financial and legal matters if you become incapacitated. Without this document, your family might need to go to court to gain access to your accounts or manage your affairs during a health crisis.

Discover more about which documents should be on your estate planning checklist by watching this video from Oak Harvest Founder and CEO Troy Sharpe.

4. Establish health care documents

Beyond financial and legal documents, protecting your health care wishes is equally important. Health care documents ensure your medical wishes are known and respected if you cannot speak for yourself. These documents are just as important as your financial planning documents.

“Most people are planning for what happens when they die. But very few people are planning for what happens if they become incapacitated,” attorney Tonya Knauth says.

A health care directive (also called a living will) clearly states your wishes regarding medical treatment in various scenarios. Do you want life support measures? Under what circumstances? These are difficult conversations, but documenting your wishes removes the burden from your family during stressful times.

A medical power of attorney appoints someone to make healthcare decisions if you cannot do so. Choose someone who understands your values and will advocate for your wishes, even in difficult situations.

Make sure family members and key people know these documents exist and where they’re stored. The best-drafted documents in the world won’t help if no one can find them during an emergency.

 

Essential Estate Planning Checklist: Key Action Items

5. Review and update beneficiary designations

While setting up your foundational documents, remember an often-overlooked aspect of estate planning: confirming and/or update your beneficiaries. Many people don’t realize that beneficiary designations on retirement accounts, life insurance policies, and pensions override instructions in your will. This means you could have a perfectly drafted will, but if your beneficiary designations are outdated, your assets might not go where you intended.

Regularly review all your beneficiary designations, especially after significant life events like marriage, divorce, births, or deaths in the family. It’s surprisingly common for people to forget to update these after a divorce, accidentally leaving everything to an ex-spouse.

Recent changes to retirement account rules, particularly the SECURE Act, have affected how inherited retirement accounts work. Understanding these changes helps you make informed decisions about beneficiary designations and whether additional planning strategies might be beneficial.

Coordinate your beneficiary updates with your overall estate strategy. Sometimes, it’s better to name your trust as a beneficiary instead of naming people directly, depending on your goals and family situation.

 

6. Consider life insurance and comprehensive insurance protection

Next on your estate planning checklist: evaluating your insurance coverage. Your insurance plays a crucial role in comprehensive estate protection.

Life insurance serves multiple roles in estate planning beyond just replacing lost income. It can provide immediate liquidity to pay estate taxes and cover final expenses. Life insurance can also help equalize inheritances among children when some inherit assets that can’t be easily sold, like a family business, while others receive cash.

Long-term care insurance deserves serious consideration as part of your estate protection strategy. Long-term care costs can quickly deplete a lifetime of savings, leaving little for your intended beneficiaries. Planning for these potential expenses helps preserve your estate.

Disability insurance protects your ability to earn income and continue funding your retirement and estate planning goals. Many people insure their homes and cars but overlook insuring their most valuable asset: their earning capacity.

Umbrella liability insurance provides an extra layer of protection against lawsuits that could threaten your accumulated wealth. In our litigious society, having adequate liability coverage helps protect the assets you’re working to pass on to your family.

Click to see all the latest retirement videos for your Estate Planning research.

 

7. Plan for tax efficiency and minimization

Insurance protection is important but so is minimizing the taxes that could erode your estate’s value. Understanding your potential tax exposure helps you make informed decisions about estate planning strategies. While most estates won’t owe federal estate taxes due to high exemption amounts, some states have their own estate or inheritance taxes with lower thresholds.

Annual gifting strategies allow you to reduce your taxable estate while helping family members during your lifetime. The annual gift tax exclusion lets you give a certain amount to as many people as you want each year without using your lifetime exemption. For families with significant wealth, systematic gifting over many years can transfer substantial assets tax-efficiently.

Charitable giving strategies, such as charitable remainder trusts or donor-advised funds, can provide income tax deductions while supporting causes you care about. These strategies work particularly well for families with highly appreciated assets who want to diversify without paying significant capital gains taxes.

If you’d like to know more about charitable remainder trusts, please watch out our video, featuring Oak Harvest’s Founder and CEO Troy Sharpe.

Your attorney and financial advisor should work together to identify trust structures or other legal vehicles that enhance tax efficiency while meeting your family’s needs.

 

8. Create a digital assets plan

With so much of our lives online, we have significant digital assets that need management after our death. These digital assets include social media accounts, online banking, cryptocurrency, and digital photo collections.

Start by documenting your digital accounts and creating a secure system for storing passwords and access information. Consider using a password manager that allows trusted family members to access the system in an emergency.

Specify how you want social media accounts and digital assets managed after your death. Some platforms have specific procedures for memorializing or closing accounts, while others require court orders to grant access to family members.

Make sure your will or trust explicitly addresses digital property. Laws around digital assets are still evolving, but having clear instructions in your legal documents guides your executor and family.

9. Organize important documents and communication

Creating a digital assets plan is essential, but it’s only effective if people can find and access your information when needed. Even the best estate plan fails if your family can’t find the documents when they’re needed. Creating an organizational system and communication plan prevents confusion during difficult times.

Create a master list of where all important documents are stored. Include location information for wills, trusts, insurance policies, account statements, and other critical paperwork. Update this list regularly as you open new accounts or change storage locations.

Inform trusted family members and your chosen executor about where to find this master list and the documents themselves. Consider giving copies of the most critical documents to multiple trusted people.

Evaluate your storage options carefully. Safe deposit boxes provide security but might be temporarily inaccessible after your death. Home safes offer convenience but might not protect against fire or theft. Your attorney’s office can store original legal documents securely while ensuring they’re accessible when needed.

Establish clear communication with key family members about your wishes and expectations. These conversations help prevent misunderstandings and family conflicts later. While some topics are difficult to discuss, having these conversations shows your love and concern for your family’s well-being.

 

10. Plan for funeral arrangements and end-of-life wishes

In addition to organizing your legal and financial documents, consider planning for your final arrangements. Planning funeral arrangements in advance removes a significant burden on your grieving family members. During emotional times, families often make expensive decisions they later regret simply because they don’t know what you would have wanted.

Specify your preferences clearly, such as whether you prefer burial, cremation, or other arrangements. Include your thoughts about memorial services, preferred locations, and any specific requests you might have.

Consider pre-paying for funeral arrangements if it fits your financial situation. This approach locks in current prices and ensures your wishes are carried out exactly as you intended. However, be careful about prepayment plans and understand what happens if you move to a different area.

Document these wishes formally in a letter of instruction accompanying your will or include them in your will. Make sure multiple family members know about these preferences and where to find the documentation.

11. Regularly review and update your plan

Finally, remember that creating your estate plan is just the beginning of the process. Estate planning isn’t a one-time event – it’s an ongoing process that should evolve with your life circumstances. Regular reviews ensure your plan continues to meet your needs and takes advantage of new opportunities or changes in laws.

Schedule formal reviews with your advisor and attorney every three to five years, even if nothing significant has changed in your life. Laws change, tax rules evolve, and your financial situation naturally shifts over time.

More importantly, review your estate plan immediately after major life events. Marriage, divorce, births, deaths, retirement, and significant changes in net worth all trigger the need for estate plan updates. Due to varying state laws, moving to a different state often requires legal document updates.

Don’t forget to review and update asset titling as your situation evolves. How you own assets affects how they transfer at death, and periodic review ensures your ownership structure still aligns with your estate planning goals.

Keep track of significant changes in net worth, as these might affect your estate tax exposure or suggest new planning opportunities. Similarly, new tax laws might create opportunities or require adjustments to existing strategies.

Take the next step

Creating a comprehensive estate plan might seem overwhelming but breaking it down into manageable steps makes the process much more manageable. This estate planning checklist provides a roadmap but remember that every family’s situation is unique.

The most important step is to start now, regardless of your age or how much money you have. Estate planning protects you during periods of incapacity and ensures your loved ones are cared for after your death. Waiting until you’re older or wealthier often means missed opportunities and unnecessary complications.

Work with a qualified financial advisor, like those at Oak Harvest Financial Group, to handle the financial groundwork and coordinate with an experienced estate planning attorney for the legal aspects. This team approach ensures all aspects of your plan work together effectively.

Your estate plan is one of the most important gifts you can give your family. It shows your love and concern for their future well-being while ensuring your wishes are honored, and your legacy is preserved exactly as you intended.

Are you ready to ensure your wishes are honored and your family protected? Schedule a consultation to begin your estate planning process and take the first step toward securing your family’s future.

 

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