Estate planning can be a very complicated, difficult process. Generally speaking, the best estate plans are customized based on the values, family circumstances and financial resources of the testator. There is no estate plan strategy that works universally for every individual.
That being said, there are certain basic needs that most testators must address. The checklist below is a good starting point for those intending to establish or update an estate plan.
Identify beneficiaries and assets
The first step to take when preparing for estate planning is to create a comprehensive list of beneficiaries. Prospective beneficiaries may include direct family members, close friends and even charitable causes.
Testators may want to create a written list of who should receive assets from their estate. They need to know what property is solely in their name so that they can address it.
They may also want to make notes of any complicating factors, such as unstable marriages or health challenges, that might make a direct inheritance problematic. Finally, they may want to select candidates for positions of authority, including their personal representative.
Establish specific goals
Particularly when contemplating a personal legacy, testators have an easier time if they create specific goals. Perhaps they want to minimize how much property passes through probate court.
Maybe their top concern is preventing their family members from fighting about their inheritances or contesting the estate plan. The goals that someone has influenced what documents they need to use and what terms they include in those documents.
Select the necessary documents
Estate planning is most efficient when people already know what documents they want to draft. Many people decide to use a will as their main testamentary instrument. Some people choose a trust instead or in addition to a will.
It is also often beneficial to create documents that address medical incapacity and the challenges of advanced age. Advance health care directives and powers of attorney can be valuable inclusions in an estate plan. People may also want to leave letters of intent so that their personal representatives can better understand their wishes and perspective.
Review documents regularly
After sitting down with an attorney to draft specific documents, a testator needs to commit to regularly revisiting those documents. After any major changes in their family circumstances, health or finances, they may need to update their documents. Checking them for accuracy every few years can also help them correct outdated beneficiary designations or recognize when it may be time to replace a personal representative.
Gathering necessary information ahead of time, drafting appropriate documents and revising them occasionally are all key components of establishing and maintaining an effective estate plan. Testators who are fastidious in their approach to the process may derive more benefits than those who don’t plan ahead before meeting with their lawyers.
