Estate Planning Checklist
Step 1—Meet with an Experienced Estate Planning Attorney to Get Started
During the initial estate planning consultation, I meet with clients with three goals in mind.
First, I ask to “tell me your family story.” I want to learn about your family, your financial situation, your needs, and what you want to accomplish with your estate plan.
Next, I spend a few minutes explaining some of the various mechanisms available to accomplish those estate planning goals, so you have a good idea about:
- What a will does.
- What a trust does.
- Why trust funding is vital if a trust is an appropriate approach to your situation.
- How durable powers of attorney work.
- Why medical powers of attorney are important.
Once I have a good idea of that you have and what you need, I make recommendations to accomplish the goals you’ve set out.
Step 2—Identify the “Cast Members”
Before I can begin to draft the necessary documents, I need to know:
- Who you want to receive your assets (the beneficiaries for a trust, devisees for a will).
- Who will be responsible to administer the estate (successor trustee for trust, personal representative for a will).
- Who you wish to nominate to serve as guardian and conservator for your minor children.
- Who you want to designate as your financial agent for your durable power of attorney.
- Who you want to designate as your patient advocate for your medical care powers of attorney.
In addition to names, I always ask for addresses and telephone numbers. This way, I can include that information, so it is readily available when needed.
Step 3—Draft, Review and Execute Estate Plan
Mostly, this work is on me. I draft the documents and include the relevant information. I’ll call or email to get additional information as needed. Once the estate plan is completed, it includes:
- Synopsis and letters of instruction—to provide guidance to the personal representative or successor trustee.
- Revocable living trust—generally the best way to hold assets and avoid probate court administration and oversight.
- Estate tax sheltering trusts (if needed)—to reduce or eliminate estate tax. Granted, this is not much of an issue these days, as the Federal estate tax does not affect most estates, with the current (2022) exclusion in excess of $12 million.
- Education, special needs, pet care trusts (if needed)—to help ensure proper handling of special situations, particularly those involving “blended” families, families with disabled persons, and families who want to ensure their pets, whether dogs, horses or large birds, are properly cared for.
- Wills and lists of gifts—to help ensure that assets are property distributed according to your wishes.
- Funeral representative designation—to nominate a person to make funeral decisions when the time comes.
- Funding instructions—to provide detailed information about how to transfer or direct assets to the revocable living trust or other trusts.
- Basic funding documents—to assign personal assets to the trust, as well as assign interests in real estate and business interests.
- Warranty deeds—to transfer ownership in Michigan real estate to the trust.
- Durable powers of attorney—to provide a mechanism for others to conduct your business at your direction.
- Durable powers of attorney for health care—to designate a person as patient advocate to make health care decisions if you are unable to do so.
- Advance medical care directives—to allow clients to specify what level of medical care you wish to receive.
- Durable powers of attorney for medical records release—to designate a person to obtain your medical records.
I’ll contact you to arrange for a meeting to review the plan. At that meeting, we’ll go over the plan specifics and address any questions that come up. Once the plan is ready, we’ll schedule a meeting to sign the documents.
Step 4—Direct Assets to Your Trust
Having a trust without assigning assets to the trust is one of the biggest estate planning mistakes known to client and attorney alike. Once an estate plan involving a trust is completed, the very first task is to “fund” the trust. What is “trust funding”?
Simply put, it is assigning all assets to the trust through a variety of ways to make sure everything you own is re-titled to or otherwise directed to the trust. I do some of this and advise you on how to work with your bankers and financial advisers to do the rest. Such assets generally include:
- Brokerage account, stocks, and bank accounts—directed to the trust, either re-titled to the trust or directed using a POD (pay on death) or TOD (transfer on death) designation.
- Real estate—deeded to the trust, generally using a warranty deed.
- Life insurance benefits—directed to the trust using beneficiary designations.
- IRA, 401(k), 403(b), and other pension plans—directed to the trust using beneficiary designations.
- Business interests—assigned to the trust, assuming that the business bylaws or operating agreements do not prohibit this.
Step 5—Meet Periodically with Attorney for “Check-Up”
Over time, things change. People move away. People pass away. It’s important to for us meet from time to time to discuss what, if any, changes need to be made to help ensure that your estate plan continues to be able to accomplish your goals. Indeed, your goals themselves may change, requiring the documents to be updated. Some of the items that may need to be updated can include:
- Updating IRA, 401(k), 403(b), pension plan beneficiary designations and bank account information.
- Updating insurance beneficiary designations.
- Updating successor trustees, personal representatives, agents, patient advocates.
- Updating contact information.
- Revising documents as needed.
Some of the life events that may trigger the need to consider estate plan updates can include:
- Receiving a large financial windfall.
- Death of a spouse or child.
- Death or relocation of persons named as successor trustees, personal representatives, agents, patient advocates.
- Purchase or sale of assets.
Step 6—Sleep Well
Once you’ve taken these vital steps to help ensure your family’s financial future, you can sleep soundly, secure in the knowledge that you have done your best to plan ahead to minimize the hassle, grief and expense of transferring wealth when the time arrives.
Remember that an estate plan is not simply a “piece of paper.” It’s peace of mind. There is no better time than today to help secure your family’s financial future with a comprehensive estate plan.