Simple Estate Planning Tasks Everyone Should Do Before They Die

Estate Planning

You may think that if you have a will, you’ve paved the way to make things easy on your family when you die.

But that’s not enough, and if you don’t have a solid estate plan, settling your affairs could leave your loved ones with a long-lasting—and expensive—burden, even if you don’t have a high-priced home, investments, or highly valuable assets to pass along.

There’s more to simple estate planning than merely writing a will. Proper planning accounts for all of your assets and wishes to make sure everything is taken care of appropriately and orderly after your death.

First Step: Organize and Make Lists

If you’re not sure how to get started, use this handy checklist developed by Investopedia to gather everything you need and to plan what happens to your assets after you pass away.

  • Take Inventory

You’ll need an itemized inventory, so grab paper and pen and go through your entire home, inside and outside. Make a list of any and all valuable items like the home itself, jewelry, collectibles, art, antiques, vehicles, etc.

  • List Non-Physical Assets

It’s now time to add the nontangible assets to your list, like 401(k) plans, IRAs, bank accounts, life insurance policies, long-term care policies, and other insurance, including health, auto and disability. Be sure to list account numbers and the location of any documents, plus the contact information for these various accounts.

  • List Your Debts

This will be a separate list. Include open credit cards and any other debts you have, including mortgages, auto loans, and lines of credit. Make sure to include account numbers, the location of any agreements and the contact information of the creditors.

  • Write Down Any Organizational Memberships

This might seem odd. After all, why will anyone care if you’re a member of a fraternal organization or something like AARP? Well, some of these organizations may offer no-cost life insurance benefits that your loved ones may be eligible to collect.

Sign and date all of your lists, and then make at least three copies. Give the original to your estate executor and the second copy to your spouse (if married) or someone else close to you. This copy should go into a safe deposit box. Keep the third copy for yourself, and store it in a safe place.

Next: Review, Assign, Select

Now that your lists are made and in a safe place, it’s time to review some documents, make it easy (and cheaper) for your heirs to access assets, and select someone to administer everything after your death.

  • Review Retirement Accounts

Make sure that the designated beneficiaries are the people you want to inherit your retirement accounts because even if you name someone else in your will, the people you name as beneficiaries on the actual accounts will be the people who receive those funds. It is important to revisit these designations periodically, ensuring your beneficiaries are up-to-date (e.g. including your current spouse if you have remarried).

  • Make Sure Your Insurance Is Updated

The same principles that apply to retirement accounts are applicable here as well. Any life insurance and annuities will go directly to your designated beneficiaries, so be sure the beneficiaries named on these policies are those whom you actually would like to benefit.

  • Make Assignments for Transfer on Death Designations

Probate, which happens when you bequeath things in your will or if you die without a will, can be expensive and can be a long process. But accounts like bank savings, certificates of deposit, and brokerage accounts can be set up to have a transfer on death designation. This means your beneficiaries can receive these assets without going through the probate process. Contact your bank and/or brokerage for designation details.

  • Choose an Executor

Your executor will oversee administering your will when you die. Select someone who is responsible and in a good mental state to make decisions. Be sure to think about how this person will be affected by the emotions related to your death. Be honest with yourself, and if you think your spouse or someone else close to you will let grief affect their decisions, consider someone else.

Now It’s Time to Draft Your Will

A will provides the rules for distribution of your assets per your wishes. This means that you, rather than your state’s laws, decide who gets your property when you pass away. Your will can also name a guardian for your minor children, designate who should care for pets, leave assets to your favorite charities, among other things.

  • You have some options when it comes to drafting a will. You can use an attorney or you can write your own will with the assistance of online services or installed software. However, it is always a good policy to have your will reviewed by an attorney familiar with estate law.
  • Sign and date your will in the presence of two unrelated witnesses who will also sign the document in front of a notary.
  • Make sure your executor has a copy. After your will is finalized, signed, witnessed, and notarized, make sure that your executor gets a copy. However, while you can make copies, only the original will can be filed for probate. Keep this original copy in a safe place that is accessible and know to others.

Other Considerations

  • You Might Want to Visit an Estate Attorney and/or a Financial Planner

To make sure that you’ve covered all your bases, for peace of mind, you may want to consult with a professional to get a full investment and insurance plan or review your current plan.  As you age, your needs change. For instance, you might need long-term care insurance or you may no longer need term life insurance. Or you might want to protect your estate from a big tax bill or long probate process. An experienced professional will know the intricacies of tax and estate laws and can help you make informed and educated decisions.

  • Streamline Your Finances

You’ve probably changed jobs, which means you could have 401(k) plans from past employers, or maybe you have several different IRA accounts. Think about consolidating these accounts.

  • Think About a Letter of Instruction

A letter of instruction leaves step-by-step directions and spells out your wishes for things such as your funeral or what to do with digital assets like social media accounts, emails, documents and photos. Make sure that all the people involved have copies of these documents.

While no one likes to contemplate the inevitable, there are numerous simple and inexpensive steps that we can all take to simplify the lives of our loved ones after we pass away and to ensure our assets are utilized in accordance with our wishes.

Contact us today to get started on your estate planning.