Estate planning checklist: 8 steps to secure your legacy

An estate plan, which includes documents such as a will and a healthcare directive, is important no matter your financial standing. This estate planning checklist can help you get started.

Your own mortality may be a subject you’d rather avoid as much as possible. But unless you leave your loved ones with clear directives about how to manage your care or distribute your financial assets at the end of your life, they’ll have to make these difficult decisions on their own.

Estate planning allows you to take control of these important issues now, so your family knows exactly what your wishes are. A proactive approach can protect your interests and help your loved ones avoid unnecessary financial and legal disputes.

Estate planning checklist

Whatever your stage of life, and whatever the value of your estate, this checklist provides a path to follow for creating your estate plan. After you draft your estate planning documents, make sure you regularly review and update them as necessary to address any life changes.

1. Designate your beneficiaries.

The first task in the estate plan checklist is to designate your beneficiaries. In most cases, the individuals you name on your investment and bank accounts — as well as your life insurance policies — will determine who receives those assets. Make sure you have primary and contingent (or secondary) beneficiaries listed for all your financial accounts, since you’ll want a backup if the person(s) who are first in line should pass away before you.

2. Assign a power of attorney.

If you experience a terminal illness or serious injury that leaves you incapacitated, you’ll want someone you know and trust to make important financial decisions on your behalf. That’s why it’s critical to name a property power of attorney (POA) — otherwise known as a financial power of attorney — while you’re still in good health.

Your POA has the legal authority to pay your bills or manage other financial considerations on your behalf, which becomes especially important if you’re in a medical state where you’re no longer able to make key decisions on your own.

In general, you should have an estate planning attorney draft your power of attorney, as the document needs precise wording to ensure your financial institution accepts it and that it will remain in force when your health declines.

3. Create a will.

Your will is the document that stipulates who will receive your assets when you pass away. It’s also where you name a guardian for any minor children when you pass away. By having these instructions in writing, you avoid having those important decisions made by the local court instead. 

You can create a basic will using online legal software, although an attorney can usually draft a simple will for a modest fee; having their guidance may provide additional peace of mind.

Once you’ve drafted and signed the document, you may want to review it with the relevant parties — including your children’s would-be guardian — to avoid any surprises.

4. Draft an advanced directive.

An advanced directive, or “living will,” is a document in which you provide specific instructions about your medical care if a future illness prevents you from communicating or making decisions for yourself. These include your wishes for end-of-life care, including whether you want to receive cardiopulmonary resuscitation (CPR).

Your advanced directive lists a healthcare power of attorney (also known as a healthcare agent or proxy), whom you designate to make medical decisions on your behalf if you’re unable to do so. Your property power of attorney can make financial decisions on your behalf, but the healthcare POA’s authority is specific to your medical care. 

5. Determine if you need a trust.

While a will allows you to name beneficiaries for your assets after your death, you may need to establish a trust if you have more complex financial needs. Unlike a will, you place assets in the trust that can be distributed at any time.

A revocable trust, also known as a living trust, gives you control over the assets you put into your account. While an irrevocable trust generally cannot be changed once it’s established, it can help protect assets from creditors and enable your heirs to avoid or minimize estate taxes. An estate planning attorney can advise you on which type of trust best suits your needs and help you establish one.

6. Address online accounts.

As important as it is to anticipate what will happen to your financial assets when you pass away, you should also have a plan to protect your digital assets. These can include your social media, email, photo and streaming services accounts, as well as your online financial accounts.

Some companies, including Facebook and Apple, allow you to create a legacy contact who can manage your account — and potentially delete it — after your death. Otherwise, a power of attorney or immediate family member may need to obtain a court order to access your digital assets.

7. Review life insurance coverage.

One of the most important aspects of your estate plan is to make sure your loved ones are financially secure, no matter what happens to you. Even if you already have a life insurance policy, you should always assess your coverage after a major life event, such as:

• A marriage or divorce
• The birth of a child
• The purchase of a new home
• A new job or a substantial raise

You’ll also want to periodically review the beneficiaries listed on your policy to make sure the information is up to date. Make sure to name both primary and secondary beneficiaries.

8. Communicate your wishes.

The purpose of estate planning documents is to clarify your intentions and eliminate, as much as possible, any disagreements about your assets or medical care when you become seriously ill or die. However, it’s still important to communicate your wishes with your power of attorney, healthcare representative and guardians so they’re prepared for the potential responsibilities they’ll undertake.

You may also want to talk with other immediate family members to explain the reasoning behind your end-of-life medical decisions and specific bequests. Being transparent with your loved ones allows you to address any questions or concerns so they truly understand your wishes.  

Working with an estate planning attorney

An estate plan helps safeguard your family when you’re no longer with them and ensures that your wishes are carried out. While it’s possible to perform the above steps on your own, you may want to work with an estate planning attorney to ensure you’ve covered all the legal and financial bases. An estate planning attorney can also work with other trusted professionals, such as your financial professional or accountant, to make sure your loved ones are left in the best possible position.

Once you have gone through the checklist for estate planning, review these steps regularly to ensure they continue to represent your intentions for after you’re gone. Addressing these matters now will provide you and your loved ones with peace of mind for years to come.

Learn about trust and estate services at U.S. Bank.