A Checklist for Your Will and Other Estate Planning Basics
You probably know that it’s a good idea to plan your estate, even though it might not be a top priority for the use of your free time. Your intention is to get to it at some point, but you have been hesitating. Perhaps you think you are too young, or you may mistakenly believe that you don’t own enough assets to require estate planning. In reality, creating a will is an essential step and should be a priority to protect your family and help express your legacy.
A will is the centerpiece of your estate plan. It is a formal, witnessed, and notarized document in which you make numerous important choices for your loved ones.
🔳 Who inherits?
Your obvious selections are your spouse and children, but you may wish to include others to receive a special gift, including parents, siblings, nieces, and nephews.
🔳 Distributions
State your intentions for distributing your assets after your death. If younger persons are inheriting, list ages at which they should inherit or receive partial distributions. Even mature adults sometimes should not get gifts from you “outright” but in trust or in smaller payments over time.
🔳 Disaster
You should have a disaster clause to name who inherits your assets if your nuclear family is killed in a common accident or passes away without further descendants (for example, if your children die without children of their own).
🔳 Executor
Name a personal representative or executor to manage the settling of your estate, including collecting your assets, paying bills, filing taxes, closing accounts, and accounting for what assets pass through your estate. Your personal representative can be your spouse, an adult family member, a close friend, a lawyer, or even a bank or trust company.
🔳 Guardian
Appoint a guardian if you are a parent of minor children up to age 18. This may be one of the most important reasons to establish a will; it allows you to name the best individual or couple to care for your children. Doing so avoids court hearings and family conflicts. You can name temporary guardians for short-term responsibility and others for permanent purposes.
🔳 Trustee
Some wills appoint a trustee who will manage your heirs’ money for their welfare until a specified age. The trustee has the unenviable job of watching the money. He or she can be the same person(s) as the guardian, another person altogether, or a non-family member or professional trustee.
Although a will is important, it is only one part of a comprehensive estate plan. Your plan should also include the following:
🔳 Health Care Proxy
While you are living, a health care proxy allows you to name another person to make decisions regarding your medical care if you become incapacitated.
🔳 HIPAA Designation
This designation allows you to list persons who may have access to your medical records to help make informed decisions about your medical care.
🔳 Power of Attorney (POA)
A power of attorney allows you to appoint a person to manage legal and financial matters on your behalf.
🔳 Homestead Declaration
Filing a homestead for your home provides asset protection against creditors of possibly your most valuable asset. In Massachusetts, a written, recorded homestead provides a $500,000 exemption of the primary residence from the claims of most creditors.
🔳 Precise Asset Titling
A comprehensive will plan reviews how you hold title to assets. It identifies who you have named as beneficiaries and whether these are consistent with the will plan and basic asset protection. For example, “joint title” means whoever lives longer owns the asset. Is this what you want? Should the beneficiaries of life insurance, IRAs, and any other accounts still be the ones you selected when you first established the accounts? Maybe not. You’ll want to make sure to carefully title your assets so you are not met with unwelcome surprises.
Here’s a printable version of these checklists to keep track of your tasks as you complete them.
Most people get to writing a will once they have children (after the second child is very typical), but even then could be too late. Life is unpredictable. You should get at it! Then, as your life changes, whether it’s your marital status, the birth of a child, or a change in your finances or health, it is important to review your will plan periodically to ensure that it continues to reflect your wishes. If you wonder whether there’s more to estate planning than these basics, there often is. Read more about options for your plan here.
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