Estate Planning Checklist
Estate planning is the process of deciding what should happen to your assets if you should die or become incapacitated, and taking the steps to ensure your decisions can be carried out. Not just for the wealthy any more, having an estate plan is an essential part of responsible financial planning for anyone who wants to meet financial goals and provide for loved ones. A financial representative and an estate planning attorney can help you design a plan that works for your circumstances. Here are some of the key steps involved:
- 1. Create an Inventory of What You Own and What You Owe-There are many good reasons to compile a comprehensive list of your assets and debts, including account numbers and contact information, as well as names and contact information for your important advisers. The Northwestern Mutual Guide for the Future is a tool for summarizing that information and saving it electronically. Keep the summary in a secure, central location – along with original copies of important documents – and provide a copy of the summary for the executor of your will.
- 2. Develop a Contingency Plan-An estate plan allows you to control what would happen to your property and assets if you or your spouse passed away today. It also puts a documented plan in place so that if you became incapacitated, your family could carry on your affairs without having to go through court. This includes a strategy for providing income if you were to become disabled and covering potential expenses for care giving that may be needed at some point.
- 3. Provide for Children and Dependents-A primary goal for many estate plans is to protect and provide for loved ones and their future needs. Your estate plan should include provisions for any children, including naming a guardian for children under age 18 and providing for those from a previous marriage that might not be specifically addressed by leaving assets to a current spouse. It also would specifically address the care and income of children or relatives with special needs that must be planned carefully to avoid jeopardizing eligibility for government benefits.
- 4. Protect Your Assets-A key component of estate planning involves protecting your assets for heirs and your charitable legacy by minimizing expenses and covering estate taxes while still meeting your goals. If necessary, your estate plan would include specific strategies for transferring or disposing of unique assets such as family-owned business, real estate or investment property, or stock in a closely held business. Many people use permanent life insurance and trusts to protect assets while ensuring future goals can be met. A financial representative can help you find the strategies that best suit your unique situation.
- 5. Document Your Wishes-If you want your assets distributed in a certain way to meet financial or personal goals, you need to have legal documentation to ensure those wishes are followed if you die or become incapacitated. This includes designating beneficiaries for your life insurance policies, retirement accounts and other assets that are in line with your goals and ensuring that the titles of material assets, such as automobiles and property, are named properly. Work with an attorney to be sure you have an updated will disposing of your assets, a living will reflecting your end-of-life wishes, as well as powers of attorney for health care and financial matters.
- 6. Appoint Fiduciaries-To execute your estate plan you must designate someone to act on your behalf if you are unable to do so – as executor of your will, trustee for your assets, legal guardian for your dependents and/or personal representative or power of attorney if you became incapacitated. You need to be sure your fiduciaries are aware of and agree to their appointments, and that they know where to find your original estate planning documents. Fiduciaries can be family members, personal friends or hired professionals such as bankers, attorneys or corporate trustees. A financial representative can provide more information about trust services and about considering Northwestern Mutual as your trustee.
Whether you are just starting out or have accumulated wealth over a lifetime, an up-to-date estate plan helps you minimize the impact of unexpected events on you and your family by preserving, protecting and managing your assets. A financial representative can help you create a financial security plan to meet your goals, and provide tools and resources to build an estate plan that makes an impact well into the future.