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Inventory all assets and liabilities — document: bank accounts, investment accounts, retirement accounts (401k, IRA), real estate (with title information), business interests, life insurance policies (face value, beneficiaries), personal property, and all debts. Note how each asset is titled and who is the named beneficiary.
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Identify key relationships and intentions — determine: who are the intended heirs, in what proportions, under what conditions (outright vs. in trust). Special situations: minor children, disabled beneficiaries, blended families, estranged family members, charitable intentions, and business succession.
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Draft or update a Last Will and Testament — a will is the foundation. It directs: distribution of probate assets, naming of an executor (personal representative), guardianship of minor children, and funeral/burial wishes. A will only controls probate assets — not jointly owned property, beneficiary designations, or trust assets.
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Evaluate the need for a Revocable Living Trust — a revocable trust avoids probate (saves 3–7% of estate value in probate costs and 12–18 months of administration time), enables management of assets during incapacity, and provides privacy (wills are public record; trusts are private). Recommended for: estates over $150K, real estate in multiple states, complex family situations.
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Designate and verify all beneficiaries — beneficiary designations on retirement accounts, life insurance, and bank/investment accounts (POD/TOD designations) pass outside probate and override the will. Review and update all designations to reflect current intentions and coordinate with the overall plan.
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Create powers of attorney — Financial POA (Durable): authorizes an agent to manage financial affairs if incapacitated. Healthcare POA (Healthcare Proxy): authorizes a healthcare agent to make medical decisions. These documents are critical for planning before death — without them, court-supervised guardianship/conservatorship may be required.
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Draft an Advance Healthcare Directive (Living Will) — document end-of-life care preferences: mechanical ventilation, feeding tubes, resuscitation preferences, organ donation. This relieves family members of impossible decisions during a crisis.
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Plan for estate and gift taxes — Federal estate tax applies to estates over the exemption ($13.61M per person in 2024, indexed for inflation; sunsets to ~$7M in 2026 if TCJA not extended). Strategies: annual gift exclusion ($18,000 per recipient in 2024), 529 plans (front-load 5 years), irrevocable trusts (ILIT, SLAT, GRAT), charitable giving (CRT, DAF).
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Address business succession (if applicable) — for business owners: document a succession plan or buy-sell agreement; ensure adequate life insurance to fund the agreement; consider a family limited partnership (FLP) or holding company for valuation discounts and transfer efficiency.
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Assemble a team and review regularly — estate planning requires: estate planning attorney (drafts documents), CFP (coordinates with overall financial plan), CPA (tax implications), and insurance advisor (coverage adequacy). Review the plan every 3 years and after any major life event (marriage, divorce, birth, death, significant asset change, law change).
