Estate Planning Checklist for 2024

Estate planning is more than writing a will; it’s a plan to manage the legacy you want to pass to your loved ones.  It documents your healthcare preferences, prepares for aging and incapacity and conveys your assets to those you choose.   The National Council on Aging (NCOA) Adviser’s article, “Estate Planning Guide and Checklist for 2024,” offers an overview of what to consider when planning your estate.  There is no perfect checklist as all estate plans should be tailored to the individuals using them, and so what you may want or need could vary, but it’s certainly a good idea of what to consider.

So, this blog will cover an estate planning checklist for 2024.

Understanding Estate Planning

Estate planning organizes your affairs to fulfill your wishes after you pass away. It encompasses decisions about money, property, medical care and care for your beneficiaries. The process includes creating essential documents like wills, trusts, powers of attorney, medical documents and more.  Estate planning provides peace of mind that your wishes are known and respected, benefiting your loved ones, so it is important to consider all of the key documents in the estate planning checklist.

Key Documents in Estate Planning

  • Wills: A legal document that outlines how to distribute assets after your death.
  • Trusts: Contracts that allow a third party, or trustee, to hold property and other assets on behalf of a beneficiary.  These are used for many purposes depending on what kind of trust, such as tax planning or probate avoidance.
  • Powers of Attorney: Legal documents that grant someone else the authority to make decisions on your behalf, such as if you want to delegate to someone or because of your own incapacity.
  • Medical Documents: Documents that state your wishes regarding medical treatment when you cannot communicate your choices.  These, depending on your state, including documents like medical powers of attorney, directive to physicians (living will), HIPAA authorization or similar documents.
  • Disposition of Remains. Some states, such as Texas, have a standalone estate planning document that indicates what your final disposition wishes are, such as cremation or burial, and who is in charge of seeing that through. Other states work these concerns into existing documents.
  • Guardianship for Children.  This isn’t applicable to everyone, but if you have minor children you can name a guardian to care for them should you pass away.  This is often one of the main reasons why young couples even consider estate planning.

Key Takeaways

  • Common Estate Planning Documents: Wills, trusts, financial power of attorney and medical documents are fundamental to estate plans.
  • Everyone Needs a Will, but Consider a Trust: Regardless of the size of your estate, a will is crucial to fulfill your wishes.  What you do beyond that is dependent on your goals and situation, but always consider a trust.  People tend to assume a trust is only for the rich, but trusts are very versatile and help with many client concerns in a way that wills cannot.
  • Review Your Estate Plan Regularly: The original article says update your estate plan regularly, I say review it.  If you don’t review it regularly, it is easy to  forget the details, which makes the estate plan difficult to properly implement and even harder to update.  2024 is an excellent year to review because the estate tax thresholds are changing in 2026, exposing more clients to estate taxes than in the past.

Conclusion

Consider estate planning to be a critical process to protect your assets, provide for beneficiaries and have peace of mind for the future. Follow the estate planning checklist to create your personalized estate plan.

Reference: NCOA Adviser (Aug 21, 2023): Estate Planning Guide and Checklist for 2024.

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Is Spouse Automatically Your Beneficiary?

People make a grave error when they don’t have an estate plan because they think their surviving spouse is their automatic beneficiary.  The laws of intestacy work differently, as explained in a recent article “Estate Planning: The spouse doesn’t always get everything” from nwi.com.

The surviving spouse doesn’t always receive everything under the intestate laws. This often comes as a surprise to people. In estate administrations without a will, I’m often told the decedent didn’t have a will because “it all goes to the wife anyway” or sometimes even “it all goes to the kids” (but that’s a different blog).

In many states, one half of the decedent’s estate assets are distributed to the spouse and the other half are distributed to the decedent’s child or children.  Similarly, many states have provisions where some property is divided between spouse and decedent’s parents if there are no kids.

To make this a bit more complicated, Texas has community and separate property.  Community property is marital property, and separate property comes from outside of the marriage, such as inheritance from that spouse’s family, a gift or something they distinctly brought to the marriage such as their home.  Separate property is treated differently in intestacy.

If a married couple lives in the separate property residence of a spouse who then dies, the surviving spouse gets a life estate in 1/3 of the property and the children take the rest.  It basically means the spouse stays in the house, but the house ultimately goes to the kids.  This essentially creates a division in which the spouse is expected to pay for some expenses, and the children for the rest.  It tends to be an unhealthy dynamic, to say the least.

Bear in mind the intestate laws only apply to assets in an estate administration.   Assets that pass by contract, such as life insurance to a named beneficiary or an account titled as joint tenants with rights of survivorship pass to those individuals.  This solves part of the property, such as bank accounts, but won’t solve the problem for everything.

I should note too that many people assume everything goes to the spouse because that’s what most people choose in their estate plans.  Practically things do go to spouse, but it required the estate plan to make it happen.  People see the common result and make an assumption on the process.

If you’d prefer to leave more to your spouse, you need a will. Intestacy literally translates to dying without a will. If you have a will and then die, you haven’t died intestate, and the provisions don’t apply.

The key in estate planning is to recognize you have a choice.  If you want everything to go to your spouse, don’t assume it’ll happen. Make it happen in your estate plan.

As one final aside, people also assume spouses can act for them if they are incapacitated.  That also isn’t automatically true and may require guardianship if estate planning doesn’t address it, although a power of attorney may avoid that need.  See here for more:  https://galligan-law.com/do-you-need-power-of-attorney-if-you-have-a-joint-account/

Each state has its own laws of intestacy, so an estate planning attorney who practices in your state needs to be contacted to determine what would happen to your spouse if you didn’t have a will. Your best recommendation is to meet with an experienced estate planning attorney and create a plan to protect your spouse, your children or your chosen beneficiaries.

Reference: nwi.com (Oct. 23, 2022) “Estate Planning: The spouse doesn’t always get everything”

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