Published on: June 19, 2014

An Estate Planning Checklist

Estate planning is a task people tend to put off, as any discussion of “the end” tends to be off-putting. However, those who leave this world without their financial affairs in good order risk leaving their heirs some significant problems along with their legacies.

No matter what your age, this article is designed to begin the process of your next upgrade for your family estate plan.

1. Create a will if you don’t have one

It is startling how many people never get around to this, even to the point of buying a will-in-a-box at a stationery store or setting one up online.

A 2011 Associated poll of 1,078 boomers found that 64% had no will or health care directive in place. That syncs roughly with statistics from a 2012 poll of 600 U.S. consumers and small business owners conducted by legal services website It found that 42% of “leading edge” baby boomers (people age 55-64) lacked wills.1,2

A solid will drafted with the guidance of an estate planning attorney may cost you more than a will-in-a-box, and it may prove to be some of the best money you ever spend. A valid will may save your heirs from some expensive headaches linked to probate and ambiguity.

2. Complement your will with related documents

Depending on your estate planning needs, this could include:

  • Trusts (ex. Living Trust, Bypass [Credit Shelter] Trust, Charitable Trust, Family Limited Partnerships)
  • Durable financial and medical powers of attorney
  • A living will
  • Other tools

You should know that a living will is not the same thing as a durable medical power of attorney. A living will makes your wishes known when it comes to life-prolonging medical treatments, and it takes the form of a directive. A durable medical power of attorney authorizes another party to make medical decisions for you (including end-of-life decisions) if you become incapacitated or otherwise unable to make these decisions.

3. Review your beneficiary designations

Who is the beneficiary of your IRA? How about your 401(k)? How about your annuity or life insurance policy? If your answer is along the lines of “Mm … you know … I’m pretty sure it’s…” or “It’s been a while since …”, then be sure to check the documents and verify who the designated beneficiary is.

When it comes to retirement accounts and life insurance, many people don’t know that beneficiary designations take priority over bequests made in wills and living trusts. If you long ago named a child now estranged from you as the beneficiary of your life insurance policy, he or she will receive the death benefit when you die – regardless of what your will states.3

Time has a way of altering our beneficiary decisions. This is why some estate planners recommend that you review your beneficiaries every two years.

In some states, you can authorize transfer-on-death designations. This is a tactic against probate: TOD designations may permit the ownership transfer of securities (and in a few states, forms of real property, vehicles and other assets) immediately at your death to the person designated. TOD designations are sometimes referred to as “will substitutes” but they usually pertain only to securities.4,5

4. Create a balance sheet of assets and liabilities

You should provide your attorney, CPA, financial professional and heirs with an asset and debt “map” they can follow should you pass away. This will help them be aware of the little details of your wealth.

  • Assets should include:
    • Bank accounts
    • Brokerage accounts
    • Retirement accounts
    • Insurance policies
    • Any other forms of investment
    • Real estate you own and its worth
    • Personal property items in your home, garage, backyard, warehouse, storage unit
    • Small business that has notable monetary worth
  • Liabilities should include:
    • Credit card debts
    • Mortgage loans
    • Any other outstanding consumer loans

5. Consider gifting to reduce the size of your taxable estate

Congress has presented you with a remarkable opportunity to do just that – and it may not be available in 2013. At present, the lifetime federal gift, estate and generation-skipping tax exemption is unified and set at $5,250,000. This means that until that date (barring an extension by Congress), you have the ability to gift up to $4.25 million more than the old $1 million lifetime limit. In addition, the gift and estate tax exemptions are currently portable between spouses. This means that for married couples, the lifetime gift tax exemption is set at $10.24 million.6

6. Think about consolidating your “stray” IRAs and bank accounts

This could make one of your lists a little shorter. Consolidation means fewer account statements and less paperwork for your heirs and fewer administrative fees to bear.

7. Let your heirs know the causes and charities that mean the most to you.

Have you ever seen the phrase, “In lieu of flowers, donations may be made to …” Well, perhaps you would like to suggest donations to this or that charity when you pass. Write down the associations you belong to and the organizations you support. Some non-profits do offer accidental life insurance benefits to heirs of members.

8. Select a reliable executor

Who have you chosen to administer your estate when the time comes? The choice may seem obvious, but consider a few factors: Is there a stark possibility that your named executor might die before you do? How well does he or she comprehend financial matters or the basic principles of estate law? What if you change your mind about the way you want your assets distributed – can you easily communicate those wishes to that person?

Your executor should have copies of your will, forms of power of attorney, any kind of healthcare 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.

9. Talk to the professionals

Do-it-yourself estate planning is not recommended, especially if your estate is complex enough to trigger financial, legal and emotional issues among your heirs upon your passing.

  • Book the CPA appointment. Utilizing a tax professional can identify the largest potential tax liability.
  • Complete practice returns. Ask your CPA to complete a preliminary tax return for the next calendar year, plus current, then a practice estate tax return to begin the planning process. This will identify your current opportunities for improvement illustrated for your financial advisor and attorney.

10. Funding

Many living trusts and other trusts go unfunded. The process is, in many cases a simple journal to a trust account.

Many people have the idea that they don’t need an estate plan because their net worth is less than X dollars. Keep in mind, money isn’t the only reason for an estate plan. You may not be a multimillionaire yet, but if you own a business, have a blended family, have kids with special needs, worry about dementia, or can’t stand the thought of probate delays plus probate fees whittling away at assets you have amassed … well, these are all good reasons to create and maintain an estate planning strategy.


  1. [5/1/12]
  2. [5/23/12]
  3. [5/7/12]
  4. [5/23/12]
  5. [5/23/11]
  6. [1/30/12]