Estate planning is an important part of ensuring that your assets are distributed according to your wishes after you pass away. To make sure that your estate plan is up to date, it's important to understand what you need to include in it. This checklist will help you gather the necessary information and documents for estate planning. The first step in estate planning is to create a Last Will and Testament. This document outlines how you want your assets to be distributed after your death.
It also names a guardian for any minor children and designates who should care for your pets. Additionally, you can leave assets to charitable organizations through your will. Next, you should list all of your non-tangible assets, such as brokerage accounts, 401(k) plans, IRAs, bank accounts, life insurance policies, and other policies such as long-term care, homeowners, auto, disability, and health insurance. If you have multiple retirement accounts from different employers or IRAs, you may want to consider consolidating them into an individual IRA. This will enable better investment options, lower costs, greater investment selection, less paperwork, and easier management. You may also want to set up 529 college savings plans for your grandchildren.
In these plans, savings grow tax-free and many states offer tax deductions for the person contributing the funds. Additionally, if your estate comes close to the federal estate tax exemption amount ($11.58 million in 2020), you should consult an attorney or tax professional. When you're ready, meet with an estate planning attorney to draft your will, medical and financial powers of attorney, and trust documents (if applicable). If there has been a change in any of the following points since the last review of your estate plan—named beneficiary, elected representative, or appointed guardian—you must take steps to ensure that your estate plan is up to date. Your estate plan should cover not only the main real estate assets but also which heirs and beneficiaries should receive items that have sentimental or emotional value. Additionally, you can include any provisions for the funeral in your will.
Finally, if you don't hire an experienced estate planning attorney to help you create your will, you may make mistakes that invalidate it. To ensure that your assets are distributed according to your wishes after you pass away, it's important to understand what needs to be included in an estate plan. This checklist will help you gather the necessary information and documents for estate planning.
