Estate Planning Checklist

School of Financial Wellness

An estate plan being created by a financial advisor and a senior couple.

A comprehensive estate plan ensures that your assets are divided among your heirs according to your wishes, but there are additional benefits to having an estate plan. For starters, proper planning can reduce the additional stress on your loved ones and beneficiaries after your passing – including avoiding the dreaded probate courts. In addition, an effective estate plan can ensure your wishes are carried out prior to your death, should you become incapacitated.

An effective estate plan provides many benefits and protections to you and your family, so it’s critical to develop your plan right away. That’s why the professionals at Meld Financial have developed this checklist to assist you in creating an estate plan that protects your wealth and your loved ones.

Click here to download the PDF checklist.

Planning Your Estate – Financial Considerations

First and foremost, it is important to work with an experienced team of financial professionals to develop your estate plan. They can help you tailor it to your specific situation and ensure that all your needs are met.

An estate plan often begins with determining how your assets should be split after your death. In addition, an effective estate plan will also minimize work for your beneficiaries and consider factors such as taxes and insurance.

Take Stock of Assets

The first step in crafting an effective estate plan is taking stock of what you own. This entails making a comprehensive list of your assets that includes:

  • retirement accounts such as 401(k)s and IRAs.
  • non-retirement investments such as stocks, bonds, insurance, and brokerage accounts.
  • cash accounts like checking and savings.
  • tangible assets such as homes, cars, jewelry, and art.
  • personal belongings including those things that have little resale value but carry immense sentimental value.

This list will be the basis for the other financial decisions that you must make to prepare your estate plan. It’s very important to ensure your list is complete and always up-to-date.

Plan for Estate Taxes

While you are taking stock of your assets, assign an estimated value to each of them. Among other things, the total value of your assets will help you determine if your heirs are subject to estate tax. The federal estate tax limit in 2023 is $12.92 million per person. Some states have separate estate taxes, and those limits are often below the federal limit. If you find that the total value of your estate exceeds the federal or state estate tax limit, consult an experienced financial advisor. The right advisor can help you estimate the impact of estate taxes and suggest ways to minimize it for your heirs.

Ensure You Have Enough Life Insurance

Life insurance can help your family tremendously – particularly if you have outstanding debt or are the sole earner in your household. A financial advisor can help you determine how much life insurance you need and find a policy that matches your situation.

Decide How You Want Assets Divided

The next step in the estate planning process is determining which of your beneficiaries should receive each asset. As you are doing this, keep in mind that leaving funds to minors and those who are unable to legally manage funds may require additional planning. An experienced financial advisor can help you determine how to transfer assets to these beneficiaries and ensure that they are managed appropriately on their behalf.

Determine Who Will Enforce Your Wishes – The Executor

You will also need to decide which person will be the executor of your estate. This is the person tasked with ensuring that your wishes are fulfilled. The executor of your estate should be someone trustworthy who has the time and ability to manage your financial tasks. These tasks often include paying creditors, issuing notices of death, and filing final tax returns.

Name Beneficiaries on Accounts

Many people are not aware that their Last Will & Testament doesn’t have the final say over some of your assets. For example, some assets pass via beneficiary designation – regardless of what is listed in your will. Some examples include brokerage accounts, 401(k)s, savings accounts, and life insurance policies. For each of these accounts, ensure your beneficiary designations match your wishes and update them immediately if there are any changes.

Work with An Attorney to Draft a Last Will and Testament

Your Last Will and Testament – or your ‘will’ – is the legal document that conveys your final wishes. A will typically includes:

  • naming of the executor.
  • instructions for how assets not passing by beneficiary designation should be split.
  • guardianship wishes for minor children.
  • specific wishes or stipulations made by the deceased with regard to the transfer of assets.

There are cases where online or handwritten wills are accepted by courts, but these are not always legally binding. To avoid legal delays and the dreaded probate courts, your will should be drafted by a qualified estate attorney.

Draft a Financial Power of Attorney

As a part of your estate plan, you should leave instructions for your wishes in the event that you become incapacitated. Designating a Financial Power of Attorney is one part of that process. A Financial Power of Attorney is a person that you appoint to make decisions on your behalf if you are legally unable to do so. The Power of Attorney document outlines the authority of your chosen representative. In most cases, this document gives the representative the ability to make financial decisions and conduct transactions on your behalf.

There are several types of Power of Attorney that can be employed for your finances, including the following.

  • Non-durable Power of Attorney. This type of Power of Attorney is effective immediately and ends if you become incapacitated.
  • Immediate and durable Power of Attorney. This type of Power of Attorney is effective immediately and remains in place if you become incapacitated.
  • Springing Power of Attorney. This type of Power of Attorney becomes effective only if you are incapacitated.

Work with an experienced estate lawyer to choose the type of Power of Attorney that meets your individual needs. Often, a Financial Power of Attorney is named when you draft your will.

Planning for Medical Needs

Your estate plan is not limited to splitting your financial assets. It should also ensure that you receive the best possible medical care should you become unable to advocate for yourself.  To ensure your medical needs are covered, compile your medical records, name a Healthcare Power of Attorney, and write a living will.

Compile Medical Records

An important part of ensuring you receive proper medical care is making medical staff aware of any conditions or medications that could impact your treatment plan. If you are incapacitated or otherwise unable to provide this information, ensure your medical records are available to the person who will handle your medical decisions.

Draft a Healthcare Power of Attorney

In addition to having your medical records, your healthcare representative needs to have the legal authority to make decisions on your behalf. This is often accomplished with a Healthcare Power of Attorney. Similar to how a Financial Power of Attorney manages your finances, a Healthcare Power of Attorney is empowered to make your medical decisions if you are unable to voice your wishes.  Choose your Healthcare Power of Attorney carefully. This is the person who will make your medical decisions, so they must be someone responsible and trustworthy.

Write A Living Will

A living will – also known as an advanced directive – is a document that controls your end-of-life care. It details what medical treatment you would like to receive if you are unable to voice your wishes. Advanced directives are often combined with Healthcare Power of Attorney.

Ensure Digital Accounts are Managed According to Your Wishes

The final step in estate planning is to ensure that the right people have access to the information they need to ensure your wishes are carried out. This includes your digital accounts like email, social media, and subscription services. Make a list of these accounts and how you would like them to be handled. Then, choose someone you trust to implement your wishes.

Estate Planning with Meld Financial

The team of tax, legal, and investment professionals at Meld Financial have the experience to help you craft an effective estate plan. We can help you title your assets appropriately, choose life insurance, and provide guidance to help your heirs avoid estate taxes.

Our comprehensive financial plan, Financial Fingerprint™, is quick to assemble, easy to understand, and simple to modify as your circumstances change. This plan accounts for your needs during your life and your wishes after your death.

To learn more and get started, contact us.

Trending Articles

Weekly Economic Update presented by Meld University
Weekly Economic Update

School of Financial Wellness

Stocks slumped. The FOMC held interest rates steady and updated projections. Existing home sales and home builder confidence fell.

Wealth managers are key to your investment strategy.
5 Characteristics of a Quality Wealth Manager

School of Financial Wellness

Looking for a quality wealth manager? We pulled together our list of the 5 most important qualities to consider during your search.

A desk with a calculator, glasses, money and 3 blocks with IRA, 401k and ROTH written on them. These are meant to represent a guide to the many different kinds of retirement plans.
Retirement Accounts: A Comprehensive Guide

School of Saving and Investing

There are so many different types of retirement accounts, it can be difficult to keep track. This handy guide makes it easy.

Why Meld Financial?

Meld Financial, Inc. is an independent wealth management firm located in Birmingham, AL.

We specialize in financial planning, investment management, employee benefits and executive benefits for individuals, families, trusts, foundations and institutions.

We provide independent and objective services melded with customer-driven financial goals.

Mark McGarvey - Founder - Meld Financial

“We will always recommend the same course of action we would choose for ourselves, given the same circumstances.”

-Mark McGarvey, Founder