Estate planning can be an intimidating process for many. There’s a lot to think about. And a DIY form set you find online won’t necessarily best suit your specific situation. We’ve put together this estate planning checklist to help you prepare for your meeting with an estate planning lawyer.
Related: Is a Free California Last Will and Testament Form a Good Choice for You?
Estate Planning Checklist Items and Specific Considerations
Exactly what items you’ll need in your estate plan depends on your situation. That’s why we’re presenting the estate planning checklist items along with some specific considerations you should think about. Additionally, we want to remind you that you should revisit your estate plan from time to time to make sure that nothing needs to be changed.
Related: Estate Planning: The Importance of an End of the Year Review
Creating a California Last Will and Testament. Every adult needs a California Last Will and Testament. The general idea is that someone only needs a will if they have a lot of assets. That’s simply not true. Yes, it is used to determine how whatever assets you have, whether they’re worth a small fortune or have nothing but sentimental value, are passed on. It is also used to name a guardian for minor children or adult children with special needs who are unable to care for themselves. If you do not create a Last Will and Testament, the probate court will follow the state’s intestacy laws for the distribution of assets. The court will also appoint a guardian. This document makes sure that your wishes are known. There are specific elements that must be included to create a valid document.
Consider whether you need a living trust or any sort of trust. There are a lot of options for trusts. Not every trust out there is right for every situation. The most commonly used trust is a living trust. Property placed in a living trust generally avoids the probate process.
Creating an advance healthcare directive. Also known as a living will, an advance healthcare directive is an important estate planning document. It explains your wishes related to healthcare (including end of life care, artificial nutrition, and artificial hydration) and names someone to help make your wishes known if you’re declared incapacitated because of a terminal injury or illness. This document takes a lot of stress off of family. Much like a Last Will and Testament, there are certain elements that must be included for it to be considered valid.
Inventorying all of your assets. The last thing you want to happen during the estate planning process is to leave out an asset. Before you consult with the estate planning lawyer, make sure that you inventory all of your assets. This includes, but isn’t limited to, your real estate (including land), physical possessions, stocks, bonds, etc. Even if you’re not sure you should list it, list it. Your lawyer can tell you whether it needs to be included.
Identifying your beneficiaries. The nice thing about estate planning is that you don’t have to leave property or money to someone just because they’re technically your heir. Your named beneficiaries do not have to be related to you. Make a list of each beneficiary and what you’d like for them to have out of the estate.
Check that your accounts have named beneficiaries or a “pay on death.” Bank accounts, retirement accounts, annuities, life insurance, and other accounts should have a beneficiary. The beneficiary can be your estate, your trust, or you can name someone to be the beneficiary. If you have a family that depends on you, this one step can help ensure that they still have access to money for necessities if you pass away and the bank account is held only in your name. Talk with your account providers and ask about naming a beneficiary or creating a “pay on death” option.
Think about estate taxes. Most people are exempt from the federal estate tax. There’s no inheritance tax in California, but your executive will need to complete your taxes for the last year you were alive. It’s important to think about the taxes that may affect your estate. Ask your lawyer if there are any specific things you can do to minimize the impact. This might include creating a trust or gifting a certain amount (or certain property) to others during your life.
Preplan for funeral and other final expenses. Planning a funeral isn’t easy for a family. You can help your family through this time by preplanning, and even prepaying, for your funeral and other final expenses. Consider, at the very least, the basics: do you want to be buried or do you want to be cremated? What is the cost for a headstone? What about the casket? What about an urn? While this may seem like a morbid research project, it’s actually a very reasonable thing you can do to in the estate planning process.
Decide who should be your executor. The executor of your estate needs to be someone who is trustworthy, and they should be able to get along with others who are beneficiaries of your estate. This person will have specific duties they must fulfill. They will report their progress to the probate court. You should think of two people: the person who you want to act as executor and someone who you want to do it if the first person cannot or will not fulfill the role.
Related: Named as an Estate Administrator or Executor? Here’s What You Need to Know
Discuss the need for a power of attorney with your lawyer. There are several different power of attorney documents. Some are revocable and some aren’t. A power of attorney is used to give someone specific authority to act on your behalf. These documents are unique because you can literally detail what someone may or may not do.
Use this estate planning checklist as a start to planning for the future. Ask your lawyer if there’s anything else that might help. It’s your estate. It’s up to you what happens to it.