Estate planning is no easy project. Taking stock of your assets and thinking about the future of your loved ones is an emotionally and physically draining experience. We’re here to help by breaking down the process into digestible steps so it’s not as overwhelming. With this planning checklist, you can rest assured that you have control over your estate and minimize stress for the people closest to you.
As you transition into retirement, estate planning might be something that’s top of mind. Estate planning is the process of preparing and organizing your personal assets collected over the duration of your life, so you and your loved ones know what will happen to your belongings after you pass. There are a number of moving parts and materials to gather for the estate planning process. As you start on this checklist, you’ll want to think about:
Now that you're familiar with some of the key parts of estate planning, let’s dive into the 6-step checklist.
Estate planning requires collecting many documents to set up a trust for your beneficiaries, draft a will, and make the rest of the process easier. It's important to keep your documents organized and within easy reach. Here’s a list of some materials to begin keeping track of:
You might think that your estate is made up only of the highest value items you own, like a car or a home. Your estate is actually everything you own, no matter how modest. Making a list of what you own is one of the most important steps in starting your estate plan, so you can keep track of where it goes after you pass. It might be easier to start with all of the physical assets you and your loved ones may care about like:
Once you have the physical assets taken down, you can start compiling information about your monetary assets, including bank accounts, businesses, savings, bonds, and investments, and life insurance policies. Make sure you also jot down any debts.
Once you have a list of your assets and liabilities, it’s time to think through your beneficiaries and heirs. Having a list of assets can help with this part—you might have a better idea of which loved ones to give certain belongings to. The most obvious beneficiaries and heirs will include your immediate family members (like your spouse and children). You can also leave things to people and organizations you care about that aren’t part of your family.
You’ll want to keep beneficiary designations up-to-date on insurance policies, retirement accounts, and other financial assets to accurately reflect changes in your life. We’ll talk more about this in detail later, but keeping your estate up-to-date can minimize tension and arguments, ensuring a fair and smooth transfer of assets.
It’s important to not only choose who your belongings will be left to but also who can make decisions on your behalf when you are no longer able to. Setting this plan early on can make it much easier to know what to do in the event of an emergency. Once you choose someone fit to be your power of attorney, trustee, and/or executor, keep them updated regularly about your plan in case anything changes.
At this point, you’ve taken the first steps in outlining your wishes for your estate. You understand the value of everything you own, which beneficiaries and heirs you want to leave your assets to, and who you want to handle the process when you pass. Now you can begin drafting your will. You may want to consult with a lawyer before you begin writing for added peace of mind. If your estate planning process is simpler, you can use online tools to draft a legally binding will too.
The one potential drawback to planning too far in advance is that you’ll have to continually update your estate plan. Many life events can occur as you start planning for your assets. You could get married, divorced, have children, buy a house, or sell your business—all of which affect your plan for your estate. Make sure you update your estate documents regularly to account for all of your assets and minimize stress for those you love.
While not the most exciting task, estate planning is important. There’s a lot to handle when someone passes—from organizing funeral services to settling taxes. Taking the guesswork out of how your estate will be divided is one way you can help your loved ones and reduce the chances of tension between them after you pass.