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Creating an Effective Estate Planning Checklist: Essential Elements and Considerations

June 3, 2024

Blueprint Income Team

Estate planning is one of the most important and sometimes daunting tasks you may undertake in financial management. It affects everyone, regardless of age or financial situation, and involves more than only drafting a will. Estate planning is the process of deciding who will receive your assets if you are incapacitated or deceased.

What is estate planning?

Estate planning is more than just a legal process; it's a strategy you can put forward to manage your assets and ensure that your wishes are honored even if you're unable to make decisions. It's a great way to make sure you provide for your loved ones during your lifetime and after your death. There are a couple of key components that go into estate planning:

  • Asset management: The first thing most people think of when it comes to estate planning is asset management. They'd be right to prioritize it, as accounting for all your assets is a major piece of estate planning. It's important to evaluate all your assets, including any real estate, investments, and personal possessions, as these are what you can distribute in the event of your death.
  • Beneficiary designation: Designating beneficiaries is another important aspect of estate planning. Designate who you'd like to receive your assets, including any life insurance policies or retirement plans. By specifying who will receive your assets, you can bypass the probate process and ensure a smooth transfer to your heirs.
  • Health care directives: Estate planning includes more than just your finances; it also involves making decisions for your health care in case you're incapacitated. You can use health care directives such as living wills and health care powers of attorney to further ensure your designated person grants your wishes when making decisions on your behalf.
  • Legacy preservation: Your loved ones aren't the only people who can receive your assets. Estate planning also encompasses charitable giving, as you can set up trust or educational funds that can support your chosen heirs for generations to come.
  • Legal documentation: Putting pen to paper and preparing legal documents that formalize your wishes is central to estate planning. These documents can include wills, trusts, powers of attorney, and health care directives. They're the foundation of your estate plan and provide the legal authority and clarity for your intentions.

An effective estate planning checklist

An effective estate plan can cover many key areas in your life. You can designate any beneficiaries you choose. Gathering information, evaluating assets, and drafting legal documents can be complicated processes. This is why we offer a handy estate planning checklist.

A proper estate planning checklist can take all the guesswork out of estate planning and leave you with a linear path toward the estate plan you're looking for.

1. Identify loved ones

The first step in creating an effective estate planning checklist is identifying the loved ones you may want to provide for in the event of your death. This can include family members, friends, or charities you wish to donate to. If you have children or dependents, this may be the time to consider appointing guardians or caregivers. You can also choose to communicate your wishes regarding inheritance with your loved ones.

2. Evaluate your assets

Once you've identified your loved ones, you can begin to evaluate your assets. Compile a detailed list of everything you own, including real estate, investments, and personal possessions. Take a minute to review your current beneficiary designations across your retirement accounts, life insurance policies, or other assets. This can be a good time to consider strategies to minimize estate taxes and avoid probate.

3. Consider your non-financial arrangements

Estate plans aren't just about money. They can give you a unique opportunity to create arrangements for future health care decisions. You can use a health care power of attorney, document your end-of-life preferences, and set up funeral arrangements. You can also use this time to write down your login information for online accounts your loved ones may need in the event of your death.

4. Plan your legacy

Your legacy is your chance to create trusts or endowments for specific charitable causes you want to support beyond your death. Reflect on your values and aspirations for future generations and explore whether there might be a potential opportunity for philanthropy. This can be as grandiose as leaving behind a sizable scholarship fund for future students of your alma mater or as cherished as donating a bench to your favorite park.

5. Create your will

One of the most important elements of an estate plan is drafting your will. It's the legally binding document that details how you wish to distribute your assets. You can nominate an executor for your will to oversee the administration of your estate.

As your life changes, so might your wishes. Remember to review your will regularly to ensure it still aligns with your values.

6. Gather your estate planning documents

The will isn't the only important document you may need. Gather everything relating to your estate, including wills, trusts, powers of attorney, and any health care directives you put forward. You should store these documents in a safe place. Once they're secure, let loved ones or trusted individuals know how to find them when necessary.

7. Appoint a financial power of attorney

If you're unable or believe you might become unable to manage your finances correctly, you may want to appoint a financial power of attorney. It should go without saying, but you must choose someone reliable and trustworthy to act as your financial power of attorney, as they'll be able to control your funds like their own.

8. Consider your spouse's estate

If you're married, coordinating estate planning efforts can help maximize tax benefits and asset protection. You may want to review your beneficiary designations and ownership arrangements with your spouse to make sure your estate plans are consistent if they're separate.

9. Plan your funeral and other end-of-life expenses

You can plan and pay for your funeral ahead of time. This can take a huge burden off your family during a difficult emotional period. It's also a good opportunity to make arrangements as you see fit and communicate your plans with your loved ones.

10. Update your estate plan

It's important to review and update your estate plan regularly. As your life changes, so can your goals, beliefs, and even the value of your assets. It's never a bad idea to review your estate plan to ensure it aligns with your current objectives and wishes.

Maintaining and updating your estate plan

Once you create your estate plan, you should maintain it. Life changes, updates to tax law, and your financial circumstances can raise the need for you to look at your estate plan and make sure it's still optimized.

The easiest way to make sure you still have the most optimal estate plan is to review it regularly. Schedule periodic reviews of your estate plan to ensure it still aligns with your current goals and desires. You should review your plan at least once every three to five years or whenever a significant life event occurs, such as marriage, divorce, the birth of children or grandchildren, or the death of a beneficiary. These life changes may impact your beneficiaries or how you prefer to distribute your assets.

Staying up to date on tax law changes is also a great way to make sure your estate plan is in a good place. Pay special attention to any laws related to estate taxes, gift taxes, and inheritance taxes when maintaining your estate plan. This can be a good opportunity to talk to an attorney or a tax advisor if you want help from a professional.

How an effective estate planning checklist can help

Estate planning is so much more than gathering your assets and designating beneficiaries. It's a way to ensure your wishes and goals will be met even after your death. It's also a great way to set up financial and medical powers of attorney, further protecting yourself in the event of incapacitation.

While the process may seem arduous, using an estate planning checklist is a great way to break the large process into tangible steps. Once you've accomplished your goal and have created your estate plan, you should review it regularly to optimize it for your current situation. Update it during family events, make sure it still benefits you regarding the tax laws, and speak with a professional to get the most out of your estate plan.

If you're looking for more information, head to our website. You can find how an annuity might fit into your estate plan.


Blueprint Income Team

We are a team of finance, insurance, and actuarial professionals working to make it easier for everyone to achieve a steady and comfortable retirement. We write about annuities (the good and the bad) and provide strategies to help Americans prepare for retirement.


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