Your Estate Planning Checklist To Protect Your Loved Ones

By Pamela Zedick, CFP®

Did you know that estate planning isn’t just for the wealthy? Estate planning is important for anyone with assets, including checking and savings accounts, real estate property, retirement accounts, and more. We believe most people need to do at least basic estate planning, but it’s especially critical for individuals and couples in their 40s. Estate planning often includes the following:

  • Designation of who will receive your property if you die
  • Organization of your assets to be easily accessible by your surviving spouse or dependents
  • Financial protection for your family in the event of your death
  • Appointment of directives to make medical and financial decisions if you are unable
  • Designation of guardianship for minor dependents
  • Strategies to reduce estate, gift, and income taxes for your inheritors

As you can probably tell, estate planning is complex and takes commitment on your part to get all aspects of your estate in order. But the truth is, you never know when you’re going to pass away. Individuals in their 40s are likely in the wealth-building stages of life or have young children they need to protect, and estate planning is not a task you want to put off until it’s too late. 

Because estate planning can feel overwhelming, we’ve created a checklist with 4 essential tasks you should complete when you’re first starting the process. These tasks are relatively simple to start with and are some of the most important steps you can take to protect your loved ones.

1. Establish A Trust For Real Property

The importance of establishing a trust for real property cannot be overstated. A trust protects your assets from the timely and expensive process of probate, particularly in California, where probate attorney fees start at 4% of the first $100,000 in your estate. (1) In addition to avoiding probate fees, a trust protects your assets from creditors and can reduce taxes. 

Trusts also include the designations for who will act as your power of attorney (POA) and medical directive. It’s important to establish these directives in your trust documents so your wishes will be adhered to if you become incapacitated. The individuals you choose will be able to act on your behalf, so they should be selected carefully and explicitly agree to these directives.

2. Maintain Enough Life Insurance To Protect Dependents

Life insurance is an essential part of estate planning, and the amount of life insurance you carry should be determined by several factors. Ultimately, you want life insurance to protect your family if the worst should happen and they lose your income. Failing to carry the proper amount of life insurance could result in debt for your family or even the loss of a home.

Life insurance should cover debts your spouse will still be responsible for if you pass away, most notably a mortgage. Your life insurance should also cover your estate closing costs and any end-of-life medical or funeral expenses. And it should provide peace of mind for your family. An experienced life insurance professional can help you determine the coverage you need.

3. Update Your Beneficiaries

A common part of estate planning that’s often overlooked is the designation and updating of beneficiaries. Beneficiary designations can change over time as people get married, divorced, and have children. A lot of people are shocked to find out that their designated beneficiary is an ex-spouse, simply because they forgot to check their accounts after the messiness of a divorce.

Beneficiaries should be reviewed annually and updated as needed. Regular updates reduce dissension among heirs because beneficiaries have been properly designated. You should review the beneficiaries for all qualified retirement accounts and insurance contracts, and named beneficiaries for non-qualified accounts should be designated TOD (transfer on death) or titled in your trust.

4. Partner With A Trusted Professional

As stated above, estate planning is a complex process. In addition to working with an estate planning attorney, you should also partner with a comprehensive financial advisor who is familiar with your assets, your life insurance contracts, and your estate wishes to ensure a smooth transition process in the event of your death.

Because estate planning isn’t a one-time task, a trusted financial advisor can help you update your estate at least annually to take into account changing life and financial circumstances. If you’re ready to partner with a financial advisor who can help you create an estate plan with confidence, we at Zuk Financial Group are here to help. Contact us at (909) 626-1947 or to schedule a complimentary consultation.

About Pamela

Pamela Zedick is a Certified Financial Planner™ (CFP®) at Zuk Financial Group with over 15 years of personal financial planning experience, a Bachelor of Arts in Accounting, and an MBA from the University of Pittsburgh. Pam specializes in serving professional women as well as educators, helping them create a plan through customized strategies and services. She is committed to acting as an investment fiduciary for her advisory clients, putting their interests first in all that she does. Outside of work, Pamela enjoys swimming, exercising at the gym, and cheering for the Pittsburgh Steelers. She also loves the arts, especially going to the theater and listening to live music. Pamela recently became a first-time dog owner, and Speck, her miniature dachshund, has become the hit of her neighborhood. To learn more about Pamela, connect with her on LinkedIn. CA Insurance Lic# 0D82095.

This information is not intended to be a substitute for individualized legal advice.  Please consult your legal advisor regarding your specific situation.