Planning Checklist

Planning Checklist

All of us understand the importance of planning. We take care of our loved ones and ourselves and plan for the unexpected. That’s why it is so important to have an appropriately documented estate plan. It’s the best way to ensure that your wishes for the future will be carried out.

How do I start an estate plan?

Most often, people begin their estate planning by creating a will or living trust. These documents stipulate how a person’s assets should be distributed when the person passes away. State and federal laws govern some of the basic terms of wills and trusts, so it’s prudent to work with an attorney skilled in estate planning when creating these documents. We also suggest you take the following steps:

  1. Make a list of everything you own, beginning with significant items but also including things you might consider minor or even irrelevant.

    What to include:

    • Real estate
    • Securities
    • Bank and investment accounts
    • Other financial assets such as life insurance and retirement accounts.
    • Personal items such as special collections, valuable furniture, jewelry, cars, and boats, and even marketable clothing.

    Also, find the documents that show your ownership of these items (including those owned by you individually, with your spouse, and with your family, friends, and business partners) so you can tell what is held jointly with a spouse or someone else, or just by you alone.

  2. Once you have an idea of what you own, think about how you would want it to be allocated.
    • Family – providing support for your spouse, children, and other loved ones, including any educational or special needs.
    • Choose and qualify who you want to be guardian for your minor children (under 18 in California), in the event your spouse passes away before you, while your children are still young. Also, consider whom you would want to manage your legal and health affairs in the event of your incapacity (this risk is often overlooked).
  3. Think about whom and what else you find meaningful, such as close friends, other relatives, and your favorite charities such as San Francisco Opera, and decide how you want to provide for them in your estate plan.
  4. Finally, if you think your children or other beneficiaries may dispute your estate gifts to them, seriously consider holding a meeting with them now, to preview your wishes and discuss their concerns, so that the chance of disputes later is lessened.
  5. Take this list or outline to an estate planning attorney who will ask important questions and draft a plan for your review.

Isn’t estate planning expensive?

Creating a will or living trust carries some expense, but the cost varies depending on the level of legal expertise required. While free advice may sometimes be available, we recommend you work with an attorney when it comes time to draft documents. Wills subject your estate to oversight by a court, and even living trusts may involve the court under certain circumstances. Working from the start with a qualified attorney may save you and your estate money in the long run.

An estate plan can also help you save money when certain provisions are included that can reduce income, estate, and gift taxes.

What happens if I don’t have a plan?

It may actually be more costly in the long run to not have an estate plan than to make one. You can also end up unintentionally  “disinheriting” the very people you want to protect. In cases where no will or living trust exists, the distribution of assets is handled by a court-appointed administrator under judicial control, using a one-size-fits-all formula devised by state law. In these cases, not only will your assets be distributed without consideration of your lifetime priorities and commitments, but a court-appointed guardian will be responsible for making major decisions for your minor children, such as where they will live and how they’re educated.

Another key benefit of a well-considered estate plan, including appropriate powers of attorney, is that you can provide for your own important lifetime needs, such as financial and healthcare decisions if you become incapacitated.

Once I have an estate plan, how often should I revisit it?

Once you’ve created an estate plan, it’s important to review it over time (at least every five years) to be sure it continues to reflect your current situation and wishes.

Here’s a checklist of some reasons you might want to revise your estate plan

  • Heirs are deceased or your wishes have changed
  • You have new family members (through birth or adoption)
  • Divorce or marriage
  • New federal and state tax laws and other laws
  • Change in guardians, personal representatives, or trustees
  • A substantial increase or decrease in the value of your estate
  • The acquisition or disposition of a large asset
  • Significant health threat