Future-Proof Your Legacy: 9-Step Estate Planning Checklist for Every Age.

By Blake Dandurand – LPL Financial Advisor | Estimated read time: 4 minutes

Whether you’re in your 20s, 30s or beyond, estate planning is a heartfelt way of handing down your cherished memories and assets to loved ones in the event of your passing or incapacitation. It’s an essential process for preserving your legacy and carrying out your wishes, so we’ve compiled a list of nine basic steps to help guide your path:

1. Assess your assets

   Start by taking stock of your financial situation, listing out assets and liabilities such as homes, personal property, bank accounts, investments and business ventures. By doing so, you can begin thinking about how to best manage your holdings.

2. Determine your goals

   Defining your goals is crucial with estate planning, so it’s important to ask yourself the following questions:

   • How would you like your assets to be distributed?
   • Are there specific gifts you prefer to make to family members or charities?
   • How can you minimize tax implications?
   • Do you need to designate guardians for any of your dependents?
   • What are your wishes regarding health care and end-of-life decisions?
   • What debts do you need to consider when planning your estate?

    

   By considering these details, you can establish clarity for both you and your loved ones throughout the process.

3. Craft a will

   A will is a foundational document in estate planning, so it’s important to work with a knowledgeable financial advisor when drafting it. The document not only outlines how your assets will be distributed, but identifies who will serve as the executor of your estate (the person responsible for carrying out your wishes). It also specifies guardianship for minor children, if applicable, and helps indicate that your wishes are legally valid in the eyes of the state in which you live.

4. Consider trusts

   Establishing trusts, which are legal arrangements where one party (the trustee) holds and manages assets on behalf of another party (the beneficiary), could prove beneficial when estate planning. This is especially true when it comes to reducing estate taxes, controlling asset distribution and enhancing privacy. (Wills generally become part of the public record, for example.)

   Setting up a trust is especially key if you own a business or hold assets that won’t automatically transfer to beneficiaries. It can provide more structured management and distribution of your assets, so your intentions are followed through correctly.

5. Designate beneficiaries

   For certain assets, like life insurance and retirement accounts, you can designate beneficiaries directly. It’s important to review and update beneficiaries regularly so they align with your overall estate plan.

6. Appoint the right decision-makers

   Depending on your situation, it might also be necessary to establish powers of attorney or proxies, essentially allowing someone to make decisions on your behalf if you become unable to do so. For example, a durable power of attorney helps with financial decisions, while a health care power of attorney assists with medical determinations. The idea is to choose someone you trust to act in your best interest.

7. Start health care planning early

   In addition to potentially establishing a health care power of attorney, you could also prepare an advance health care directive, which is a document that outlines your preferences for medical treatment in the event you can’t communicate your wishes. Regardless of what health care options you’re considering, it’s important to discuss your wishes with your health care proxy and/or family members.

8. Organize important documents

   Remember to keep all your estate planning documents in a safe and easily accessible place. Additionally, it’s important to inform your trusted loved ones about when, where and how to access this information.

9. Partner with an advisor

   Navigating estate planning on your own can be complex, so as a friendly reminder, working with knowledgeable advisors can simplify the process significantly. They’ll guide you through the legal and financial aspects of your plan, touching base regularly to address any life changes and approach each decision with confidence.