I am frequently asked for a checklist of items to consider in making an estate plan. So I have put together a brief list of important items to consider. This list, however, is by no means exhaustive. Consider the following:
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Which persons or entities will act as your personal representative (executor) when you die? You may name one or more persons to act together, or in an order of priority. You may also name a trust company in some circumstances. This person or entity will be responsible for paying your final debts and expenses of administration, filing tax returns and distributing your property.
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Which persons will act as your agent for financial and health care matters should you become disabled? You may list persons in order of priority or together. If listed together, you may either require a majority or unanimous decision or you may give each person listed independent authority so that whomever is available makes the decisions.
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Do you want a living will? This document indicates that you do not want care that merely artificially prolongs your life should your physicians conclude there is no hope you will recover.
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To whom will your property be distributed at your death? A spouse, children, or other family members are most commonly named. Their shares may be left to them outright or in trust. Also, don’t forget the possibility of naming charity for part of your estate.
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If property is left in trust, what will the trust terms say? Will the trust beneficiaries have access to both income and principal, and for what purposes may the trustee make those distributions? Will the trust end when the beneficiary reaches a certain age? Trusts, if properly drafted, may avoid the claims of a beneficiary’s creditors, or a beneficiary’s spouse in the event of a divorce. Trusts may also avoid certain estate taxes. Trusts are also useful for underage beneficiaries or for disabled or irresponsible beneficiaries. Such trusts may be created under a person’s will or in a revocable trust.
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Is avoiding probate court an important goal? If so, using a revocable trust, beneficiary deed, joint accounts, POD (pay on death), TOD (transfer on death), or ITF (in trust for) designations may be appropriate.
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Don’t forget to make sure that beneficiary designations on life insurance, IRA accounts or other retirement accounts and annuities work properly with your will or trust.
