A comprehensive estate plan will protect you, your family, and your assets. However, it’s all too easy to make a mistake while planning your own estate, and any errors can result in costly and unnecessary court proceedings as well as frustration or even financial hardship for your family.
While nothing can substitute for the advice and guidance of an experienced attorney when you’re going through the estate planning process, this checklist can help you assess the strength and quality of your current estate plan.
1. Evaluate Your Personal Estate Planning Goals
Everyone’s financial and estate planning goals are different. Before you create an estate plan, you should think carefully about your (and your family’s) needs, values, and priorities.
Some of your goals might include:
- Securing your spouse’s, partner’s, child’s, or grandchild’s financial future
- Supporting your children’s education
- Protecting your minor children and helping them through a difficult time
- Avoiding unnecessary court hearings or tax bills
- Directing your medical care if you become incapacitated
- Supporting charitable organizations
If you have an existing plan, you should review it to ensure that it thoroughly addresses your goals. And, if you come across anything that doesn’t line up with your priorities, contact a West Michigan estate planning lawyer for help revising or amending your will or trust documents.
2. Organize and Inventory Your Assets
You might know exactly where your investments, property, and insurance policies are, but do your loved ones have access to this information too? Most people never find the time to discuss their financial holdings with their family in detail. After your death, it can be surprisingly easy for your family members to lose track of property, bank accounts, investments, safe deposit boxes, and other assets as they try to sort everything out.
Before you draft your estate plan, take some time to identify your property and compile an inventory on paper or in an electronic document. This document will serve two purposes: it will help you understand the value of your estate, and it will make it easier for your loved ones to access their inheritances after your death.
3. Create a Last Will and Testament
A last will and testament (often just referred to as a “will”) is a vital part of your estate plan. A will is a legal document that explains your final wishes regarding your assets. Without a will, the court might distribute your property under Michigan’s rules of intestacy, which are the laws that govern what happens when someone dies without a will (also called dying “intestate”).
These rules are “one-size-fits-all” in nature and don’t consider your unique needs and wishes, so they can lead to lots of undesired consequences. For example, they may cut out your children from a previous marriage or relationship, even if you wanted to provide for them after your death.
Depending on your circumstances, your will might be a very simple document. However, your will’s complexity should depend on your family structure, assets, and goals. A West Michigan estate planning lawyer can help you draft a thorough, legally-binding, and cost-effective will.
4. Determine Whether You Need a Trust
Trust’s aren’t just for the ultra-wealthy. They are a powerful estate planning tool, and they can serve many purposes. For example, you might establish a living trust, helping your loved ones avoid probate court and estate taxes. If you have a disabled family member, you might consider a special needs trust. And, charitable trusts can help fund non-profit organizations you support.
To learn more about trusts and the various important functions they can serve, read our previous blog article on the subject of wills versus trusts.
5. Draft Powers of Attorney
Your estate plan should protect you as well as your family. If you become seriously disabled, you might be unable to tend to your financial affairs or operate your business. One important estate planning document, a power of attorney, designates a person to assume control of your finances and business matters if you become incapacitated.
Importantly, the person you designate as your agent does not have to be an attorney, but you should choose someone whom you trust and who excels at attention to detail.
Beyond appointing someone to look after your financial affairs, there’s also a medical power of attorney, which you can use to designate a trusted person who can make important healthcare decisions on your behalf if you become severely disabled and can’t tell doctors what you want.
6. Protect Your Minor Children with Guardianships and Trusts
If you’re the parent of a minor child or a disabled adult, their welfare is probably one of your top priorities. While a parent’s death or incapacitation is always a difficult event for children, you can help make things easier on them with thoughtful estate planning.
RELATED: 5 Estate Planning Questions for Grand Rapids Families
At the least, you should designate a legal guardian for your child, and it’s also a good idea to work with an estate planning lawyer and establish trust accounts that you can use to benefit your child’s education and future.
7. Create Health Care Directives
It’s important to have documents that provide clear guidance about your medical wishes in case you become incapacitated and can’t express those wishes yourself. A set of clearly-written health care directives can help your loved ones make difficult healthcare-related decisions. Your health care directives can address your treatment preferences, including items like a “do not resuscitate” order and information about your organ donation wishes.
8. Double-Check Your Beneficiaries
Your life might have changed significantly since you opened a bank account, signed up for employment-based life insurance, or purchased stocks and securities. As part of your estate planning, you should review your accounts and policies. Do you need to change any of your beneficiaries?
Additionally, assess your life insurance and disability insurance coverages. Are your policies sufficient for your current needs? As an example, you might want to increase your life insurance coverage if you’ve recently had a child, assumed significant debt, or anticipate owing large amounts of estate tax.
9. Make Funeral Arrangements
Many families struggle to plan and pay for their loved ones’ funerals. To keep this from happening to your family, you can fund a bank account that is payable-on-death for some or all of your funeral expenses. And, you can also use your estate plan to express your wishes about your cremation or burial and your memorial service.
10. Explain Your Estate Plan to Your Loved Ones
At Phillips & Santana, we believe that it’s important to communicate your final wishes and estate planning goals to your family. After your death, surprises in a will or trust might result in disputes, hurt feelings, and damaged relationships. If you need help explaining your estate plan, we can help facilitate these discussions in a natural and comfortable way.
11. Schedule a Date to Reassess Your Estate Plan
Families change over time due to births, deaths, divorces, remarriages, and other events. Unfortunately, your estate plan won’t magically evolve with your family. You should schedule regular reviews with your West Michigan estate planning lawyer so they can work with you to assess your goals and your family structure and then determine whether your estate plan needs revisions.
Get Confidence and Peace of Mind: Make the Law Offices of Kari Santana Part of Your Plans
Quality estate planning requires attention to detail and careful consideration of your goals and values. At the Law Offices of Kari Santana, we work closely with clients in Grand Rapids and throughout West Michigan to build comprehensive and affordable estate plans that are tailored to their unique needs and wishes.
If you need help creating or revising your estate plan, contact us for a free initial consultation by either completing our online contact form or calling us at (616) 717-5759.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.