Estate Planning: Get Your Affairs in Order With This Checklist

Nobody wants to discuss matters regarding the end of their lives (or what will happen after they’re gone). Evaluating one’s life from the lens of death is raw and scary. However, our hesitation should not keep us from exploring this facet because it is inescapable.

Financial advisors encourage clients to begin by thinking about the end. In actuality, it is the best way to plan your finances because what matters most becomes clear in the process. The visual colloquialism of no U-haul being present behind a hearse is a powerful way to plan one’s end of life.

In terms of estate planning, millennials are still struggling. Compared to 33% of Gen-Z who have an estate plan, only 36% of millennials are prepared for the future. That is an odd comparison, right? It’s not because it highlights how the ‘younger generation’ has awakened to the importance of an estate plan.

If you own a property and assets, do not wait till you’re a senior adult to decide how they’re distributed after death. This article will act as your important checklist for getting your affairs in order the right way, while you’re still young.

Itemize Your Inventory

You need to start by knowing exactly the number and types of assets under your possession. This includes physical and non-physical assets. First, walk in and out of every room inside your home.

As you do so, note all the valuable items you find. These may include, but are not limited to, jewelry, arts and antiques, collectibles, lawn tools, and power equipment. While taking stock, note down any names that come to mind for each valuable item.

In other words, you can leave behind each item to a particular person from your family or even a charitable institution. Consider snapping a few photos to remove all confusion and fast-track this project.

In the process, document all non-physical assets too. These include bank and brokerage accounts, life insurance, and investments. Include enough specifics, like account numbers and the location of physical documents.

You should also list down the contact information of any firms that have possession of your non-physical assets. Your heirs will then find it easier to claim what is theirs.

Draft Your Will

Perhaps the most important aspect of any end-of-life financial planning is the will. Ideally, anybody over the age of 18 should have a will that clearly states how assets are to be distributed after death.

The shocking part is only 32% of American adults have a will in place. That’s not even half the adult population! Those who do not have a will yet are only complicating matters for their heirs.

When is the right time to draft this legal document? We would recommend as soon as you’ve itemized your inventory and decided who gets what. Now, the will goes beyond assigning an individual’s assets to different beneficiaries upon death.

Asset-Map shares that you can also name a guardian for your minor children. Include a caretaker’s name for your pets, in case you have any. You can write your own will but it’s wise to get professional support.

Financial advisors often use robust technologies and software that make the process easier. You will have a visual report with all assets along with current beneficiary designations for a personalized end-of-life estate plan.

Choose a Responsible Estate Administrator

As per Cornell Law School, the administration of an estate involves the management of assets and liabilities after an individual’s death. The court will appoint an administrator for the estate if one is not already named in the will.

However, it’s best to have control over this aspect of estate planning as well. The estate administrator will be responsible for administering your will after death. You need to select someone responsible and competent enough to make wise decisions.

It can be tempting to name your spouse here, but they may not be the best choice. Think in purely practical terms; your spouse is likely to be the most affected by your death, right? You need someone for this role whose emotions do not get in the way of their decision-making.

If you’re confident that your spouse will not face any issues with this, keep them as the estate administrator. However, in case of doubts, choose a friend or family member who you trust will act impartially on your behalf.

Evaluation the Documents Regularly

If and especially when you’re young, the will cannot serve as an end-all document. In other words, you should consider it to be a work in progress.

Life rarely stays stagnant. As you experience different life events, your assets may also change. This means you will need to review and make necessary changes to your will as well.

The golden rule is to recheck your will every year or at least every two years. Also, consider reviewing after any major life events, such as marriage, possession of new assets, or changed relationships with beneficiaries. These events may lead to a desired change in terms of asset distribution.

Another aspect to keep in mind is the geographic location. If you have relocated, particularly to a different country, there may be separate legal requirements for a will. In any case, laws surrounding wills do evolve, so even they need to be considered.

On a parting note, we would like to point out some common estate planning mistakes that you should avoid. Let’s see a brief rundown of each mistake –

• Not preparing a will at all. This can make life chaotic for your loved ones after your passing.
• Not assigning a power of attorney or healthcare proxy since there is a possibility of being incapacitated.
• Failing to communicate. You need to talk to your loved ones about your estate plan.
• Forgetting all about one’s digital footprint. Let your loved ones know about how you want them to handle your social media accounts.
• Failing to update the will. You need to ensure that your estate plan reflects your current wishes regarding asset distribution.

We hope this article has helped you understand why and how you can get your affairs in order. Do it now to enjoy better financial stability, avoid legal disputes, and ensure your loved ones are taken care of.