The Estate Planning Checklist: Do You Have Everything in Place?

Estate planning is important, particularly for those who own real estate. We have provided an estate planning checklist below, but let’s talk a little more about why it is important to be prepared.

Estate planning allows you to make decisions about what will happen to your estate after your death, as well as in cases when you might be disabled or unable to make decisions for yourself.

Estate planning is something that people tend to put off. It is difficult to think about your own death or disability and many tell themselves they will do it eventually, but this is not something you want to leave until it’s too late because it may lead to additional costs and complications for the beneficiaries of your estate.

Taking the right steps now will help you protect yourself and your family, and ensure your wishes are fulfilled.

An Estate Planning Checklist for Those Who Want to Be Prepared

Estate planning doesn’t have to take up a lot of your time, and it will help you get all of your financial and legal matters in order if something does happen.

1. Take Inventory of Your Assets

Before you set out your wishes for what you want to happen to your estate, you should have a clear idea of what you need to think about. Anything that you own is part of your estate, even if it’s only a modest amount of savings.

Some of the things that make up your estate might include:

• Real estate properties, including your home
• Your savings and investment accounts, including retirement accounts
• Valuable assets such as vehicles, jewelry, artworks or other physical items
• Insurance policies, including life insurance

As well as considering your assets, you should also take stock of any liabilities. These include mortgages, lines of credit, loans and other debts.

Some of your assets will be subject to probate. Probate assets are anything owned by a deceased person that has no way of passing to a living beneficiary without a court-supervised probate process.

Probate is necessary only for property that was:

• Property owned solely in the name of the deceased person—for example, real estate or a car titled in that person’s name alone
• A share of property owned as “tenants in common”—for example, the deceased person’s interest in a rental property owned with another person as an investment.

2. Consider Your Wishes

Before getting deeper into the ways you can set out your wishes for your estate, think about what you really want. It’s a good idea to consider who you want to have what and in what proportions.

If you have minor children or anyone you care for, such as a disabled adult or parent, who do you want to look after them and their needs if you are no longer able to? Do you want to set aside money for specific purposes, such as your children’s education?

As well as thinking about what will happen to these people upon your death, consider what you want to happen if you are still alive but can’t make decisions for yourself.

3. Asset Ownership

Make plans for ownership of your assets after your death.

One way to do this, outside of including it in your will or setting up a living trust (see below),  is by having your half of ownership pass automatically to a co-owner. You can do this with assets such as real estate or vehicles. This is called “joint tenancy.”

Usually, the co-owner is a spouse, but it could be someone else. The title document needs to show that the owners have the property as joint tenants with rights of survivorship, tenants by the entireties, or community property.

When listing someone as a joint owner, remember that it means you will need their permission to sell the property or to use it to secure a loan.

If you don’t want to give someone co-ownership of an asset now, you can choose for them to receive it after your death. This can be done with bank accounts and other financial accounts, real estate, and vehicles.

4. Write a Last Will and Testament

Creating a will allows you to set out many of your wishes for after your death as well as helping you to make arrangements for your assets and finances.

You can use a last will and testament to:

• Express your wishes for the care of minor children (or anyone else who might need care).
• Disperse any of your property that hasn’t automatically transferred to a joint owner or a designated beneficiary can be addressed in your will.
• Appoint someone to be the executor for your estate. It will be their job to ensure that your wishes are carried out.

5. Set Up a Living Trust

A living trust is an option to consider to help make distributing your property easier. It’s an especially smart choice to set one up if you have a large estate.

A living trust allows you to avoid probate, which is useful if you want to reduce estate taxes owed. With a living trust, you transfer the title of your property to the trust and you will control it as the trustee.

You can also appoint someone as the successor of your trust so that they become the trustee when you die or if you are no longer capable of managing the trust yourself due to illness or disability. The transfer to the new trustee occurs without the need to go through probate.

There are two types of living trusts:

• A revocable living trust is the most common, allowing you to revoke it whenever you want.
• An irrevocable living trust is less common, and some people use it for Medicaid planning, but you have to give up your right to revoke the trust.

6. Power of Attorney

When working on your estate planning, think about how your estate will be managed while you are alive but unable to make your own decisions.

Giving someone power of attorney means that they can make decisions for you. You could allow someone to do this right away, or arrange for them to have power of attorney after a certain event, such as you being mentally incapacitated.

There are two types of power of attorney: A financial power of attorney and a medical power of attorney.

A financial power of attorney says that someone can act on your behalf regarding financial matters. The person who will make decisions for you is the principal, and the person who acts on their behalf is the agent or attorney-in-fact.

A medical power of attorney gives someone the right to make medical decisions for you if you can’t do it yourself. If you choose to set up a medical power of attorney, you should discuss your wishes with the person that you want to appoint and with your health care agent.

It is important to seek legal counsel when you are planning your estate for the future. Doing so can help ensure that you check all of the boxes needed to protect yourself and your assets, and keep family tension to a minimum.

The estate planning attorneys at Oswald Law in Hutchinson, KS are here for you. We will help you effectively distribute the property and assets you have worked hard for all of these years. Click here for more information on our Estate Planning Services or contact us at 620-662-5489 for a free consultation.