Estate Planning Checklist: Minimizing Anxiety and Confusion

Preparing in advance with family and advisors can ease administrative burdens and reduce anxiety during an extremely emotional time.

Wills, health care directives, and powers of attorney. Most people know they should prepare these items and make them available to trusted family members before the unthinkable—yet inevitable—happens. When a loved one dies, family and friends have to review important documents and make critical decisions. Having these details available can make the end of life a little less painful for those who remain. End-of-life planning is often a difficult topic to discuss, especially with your family. However, without proper estate planning in place, many families will be left in the dark during a challenging time. These decisions impact more than investments and assets. They can lay out steps for any unforeseen health issues and protect the relationships your family members will have with one another in the future.

For example, something as seemingly innocuous as ownership of a summer home can cause serious issues among a family if a decision isn’t made about sharing, selling or otherwise utilizing the property after the primary owner passes on. Estate planning for vacation homes must be considered as part of this process, among many other needs. Understanding the full extent of these obligations, and preparing in advance with family and advisors, can ease administrative burdens and reduce anxiety during an extremely emotional time. 

Here Are 10 Helpful Estate Planning Steps to Consider for Peace of Mind

1. Collect relevant documents

First, gather all the necessary documents. These should include the title to physical assets, deeds to properties, birth and marriage certificates, and burial plot information. You should also gather any estate planning documents currently in place, such as wills, trusts and financial and medical powers of attorney, as well as life insurance policies and information on retirement account beneficiaries. Also, be sure to have the name and contact information for your doctors, lawyers, accountants, financial advisors and insurance brokers. Ensuring all important documents are ready and your family knows how to access them will help streamline the estate planning process.

Important estate planning documents to consider include:

• Will and/or trust.
• Durable power of attorney.
• Health care power of attorney.
• Beneficiary designations.
• Letter of intent and/or last wishes.
• Advance medical directive.
• Asset inventory (including digital assets). 

2. Secure your digital assets and documents 

Many people take a fully digital approach to managing their assets. This means close family members likely do not have the passwords to access your accounts or even know where your accounts are located. Choose a trusted person and grant them access to your account information. Don’t stop at banking and investment accounts. Also include logins for bill pay, social media, emails, frequent-flier miles, online photos, domain names, virtual currency and any other online domains. These items may have great sentimental value—another reminder that estate planning for vacation homes is crucial, even in a digital context—as well as monetary value that can generate revenue for your heirs.

Define your digital assets in your estate planning document and indicate to whom they should go and what can be deleted. Additionally, outline in your powers of attorney, will, and revocable trust who should have the authority to deal with service providers controlling your digital assets. Having copies of all your important documents is critical. It is also important to store paper documents in a secure location, such as in a fire-proof safe, where a trusted person has access. You can also make electronic copies of documents that are sent to advisors and loved ones.

An estate attorney or financial planner can help determine your financial goals and manage your wealth for the future.

3. Visit an estate attorney and/or financial planner 

While you might think that you have covered all your bases, it can be a good idea to consult with your advisors to review your estate and financial plans. As you get older, your needs may change, such as determining if you need long-term care insurance and protecting your estate from a large tax bill or lengthy court proceedings. Professionals will also be current on changes in legislation as well as income and estate tax laws, which could impact your plan. Before meeting with a professional planner, consider your initial goals, hopes and desires. For instance, in the years ahead, what do you want to accomplish? Do you want to create a business? Sell a business? Do you want to travel the world, build a home or pay for your grandchild’s education? Does estate planning for your vacation homes need to be a priority to avoid a fight within the family?

Next, think of what you want your wealth to accomplish after your death. For example, do you want to leave all your money to your children to do with as they want, or do you want to control their access so that your legacy extends beyond the next generation? Do you want to leave money to a charity? An estate attorney or financial planner will work with you to ensure end of life documents reflect your goals and cover important scenarios. 

4. Ensure you have a will 

Creating a will is one of the most important things you can do when it comes to estate planning. A will addresses how you would like your property to be distributed and who is empowered to oversee the management of your estate. If you don’t make a will, you are leaving decisions up to the estate laws of the state where you live, and the result could differ from your intentions. Once your will is finalized and signed, make sure that your estate administrator receives a copy. If the original is not kept in your home because it is kept at your attorney’s office or another secure location, you should also keep a copy in a safe place at home. Finally, make sure that all the concerned individuals have copies of these documents. 

A revocable trust can protect you in the event you are declared incompetent to handle your financial and/or personal affairs.

5. Create a revocable living trust 

A revocable living trust can help ensure that your assets are distributed efficiently to your beneficiaries in the manner you’ve outlined. A revocable trust can also protect you in the event you are declared incompetent to handle your financial and/or personal affairs. A revocable trust allows you to keep control over property that is placed within the trust during your lifetime. A corporate fiduciary may be a prudent solution to serve as a successor trustee, as they have the experience and knowledge to manage the trust upon your death. If all your assets are held in the trust at your death, asset distribution should run smoothly, which may avoid probate and save angst, time and money. 

6. Name an agent or attorney-in-fact through a power of attorney 

A power of attorney names the person who will make decisions for you in case you cannot make them for yourself. You could establish a durable health care power of attorney to cover health care decisions and a durable financial power of attorney to cover financial decisions. You can also write a letter of instruction to provide a step-by-step process that spells out your wishes for things like your funeral or what to do with your digital assets, such as social media accounts. If you are married, each spouse should create a separate will, with plans for the surviving spouse.

A power of attorney names the person who will make decisions for you in case you cannot make them for yourself.

7. Create a living will 

It is also essential to create a living will, also known as an advance directive. Unfortunately, medical emergencies happen, and in the event you are incapacitated or unable to make decisions, a living will can express your desires related to end-of-life treatment. A living will should also address your preferences on the continuation or discontinuation of medical treatment, including breathing or feeding tubes. Provide a loved one or your estate administrator with the information on what should happen immediately after your death. That should include: your funeral, any cremation plans and potential organ donor designation, as well as any payable on death accounts that would help defray funeral costs. You can also include a Health Insurance Portability and Accountability Act (HIPAA) authorization, which allows your chosen representative to speak with health care professionals about your private and protected medical records. 

In the event you are incapacitated or unable to make decisions, a living will can express your desires for end-of-life treatment.

8. Consolidate your finances

If you have changed jobs over the years, it is quite likely that you have several different retirement plans with past employers. You may want to consider consolidating these accounts into one individual IRA. Combining accounts generally allows for better investment choices, lower costs, less paperwork and easier management. 

You may want to consolidate retirement plans with past employers into one individual IRA.

9. Review frequently 

Review your will and estate plan for updates at least once every two to five years and after any major life-changing events (such as a marriage, divorce or the birth of a child). Life is constantly changing, and your assets and wishes are likely to change from year to year. Many estates run into problems when loved ones discover the deceased had not updated their documents in years. 

Estate plans should be updated every two to five years and after each major life event.

10. Communicate with family and fiduciaries 

While it is important to gather all the necessary forms and create new documents, it is also crucial to speak about your wishes with your loved ones. It might be a hard conversation, but it is for the best to ensure everyone is on the same page and your plans are followed. Discussing your wishes regarding art, jewelry, second residences, and other tangible assets with family members or drafting a letter that outlines your preferences, can avoid confusion and disagreements. These steps are often more efficient than creating a formal list within a will. Consult with your attorney as to which course of action is prudent in your state. Keep shared assets in mind, and do not overlook the importance of estate planning for vacation homes. Speak with named fiduciaries about the details of their roles, and make sure they are comfortable with handling the many responsibilities.

Though it can be a tough conversation, it is important to communicate your wishes to your loved ones. 

How Comerica Can Help

You can consult with an estate planning attorney, your wealth advisor and your accountant to make sure all your questions are answered, and your documents are prepared. Our team of Comerica Trust professionals can also assist with any questions that you may have regarding trustee and executor services. When we serve as executor or trustee, our approach is comprehensive and guided by our commitment to fulfill your final wishes with utmost integrity, fairness, and consideration for all beneficiaries. Estate planning can be stressful but having a plan in place ahead of time can help ensure your family is taken care of and your wishes are met exactly as you intended. Take the next step in your estate planning and contact Comerica Wealth Management today.