What to Consider When Preparing Your Estate Plan

You can plan to transfer your assets on a tax-efficient basis throughout your lifetime, to take advantage of the highs and lows in economic cycles, and to preserve most of your wealth at your death. Without those plans, however, you could lose half of it.

A lifetime of complicated personal relationships makes the transition of wealth more difficult. That’s why we look to significant legal documents—your will, power of attorney, and health care directives as well as your significant financial documents—the personal net worth statement, tax returns and your financial plans, for guidance.

Whether you are already alone or preparing to be alone, protecting your assets at the time of death is an important obligation to your family as well as society. Consider the following checklist for starting an estate plan:

Objectives for Starting an Estate Plan

• Identify financial institutions. Where are your  assets  held? Include key contacts.
   
• Identify advisors. Who are your professional advisors including banker, accountant, lawyer, stockbroker, insurance agent and what is their contact info?
   
• Identify proxies. Who will exercise Power of Attorney if you become disabled or cannot direct your own personal affairs?
   
• Identify heirs. List exact contact information, as well as their relationship to you. In the case of singles, these heirs could include your favorite charity. Discuss options for the transfer of assets and funds during your lifetime and at death.
   
• Identify gifts. Sketch out what you wish for each of your heirs to receive.
   
• Identify needs. Will any of your heirs require assistance with ongoing income?
   
• Identify executors. Prepare a list of possible executor(s) and make approaches.
   
• Identify guardians. Prepare a list of those to whom you would trust the care of your minor children, as well as those who should not have that responsibility.
   
• Identify business succession plans. How should your business interests be distributed, and who should step in to run the show?
   
• Plan for probate fees and capital gains taxes at death. Review life insurance policies that may be used for those purposes.
   
• Identify capital assets and their fair market value annually.
   
• Identify asset transfer instructions. Which assets should be transferred during your lifetime, and which should be transferred only upon your death?
   
• Make plans for safekeeping. Keep all important documents in a safety deposit box and identify the location.
   
• Deal with debt. Cleaning up spilled milk is no fun for anyone… especially if it’s been there for a while. List debt obligations and the order they should be repaid. Make a list of ongoing financial obligations that should be cancelled on death.
   
• Draw up your will. Tell your lawyer where it is to be kept.