Estate Planning Checkup: 15 Minutes To Put You On a Good Path
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Estate planning is sort of like golf, tennis or baseball; if you don’t have good follow-through, you’re probably bad at it. It’s great to recognize that you may not understand everything about your estate plan, but you know that saying about good intentions.
We’re sure you’d rather read an article about something exciting, like how to plan a road trip or how to buy your first house. But you’re here, we’re here. And we’ve designed a 15-minute checkup to help you start or update your estate planning. It may take you a few hours to complete a thorough review, but these 15 minutes will give you the momentum to take that final swing.
Here’s your checklist:
Make or update your list of stuff you want to pass along
Select or review your estate administrator(s)
Make a list of financial accounts to track down
Make a plan to write or update your will
Find or consider your other documents
To keep you and us honest, you can use the timer app on your phone to keep track. We’ll provide prompts for what to time.
Make a List of Your Stuff
That is, what do you own that you want to pass on? Maybe you have jewelry or an old coin collection. Maybe you have knick knacks and souvenirs you picked up when you were traveling the globe? The list may end up being for you, to help you stay organized, or it may be something you pass onto your estate administrator or executor who will someday be in charge of your belongings. Either way, you have to start somewhere. Start by creating a single list, or if you own a lot of stuff, a lot of lists.
And don’t put this off. “The ideal time to start thinking about estate planning is right now,” says Mitch Mitchell, associate counsel of estate planning at Trust & Will, an estate planning website and the official estate planning benefit provider for AARP members.
Mitchell says that in his experience, he sees people mostly in their 50s starting to create an estate plan, but even if you’re much younger, especially if you have kids, that’s not a bad time to start.
Take 5 minutes right now and start your list. You won’t finish, and that’s OK. Just open a document on your phone or computer and jot for 5 minutes straight. Don’t blame us if you end up working on this for 15 or 20 minutes. If you already have this list, take 5 minutes to find your document (and if you can’t find it, you can start to see why follow-through is so important).
Find Your Estate Administrator
Since we brought it up, let’s talk about this next. Somebody needs to be in charge of dispersing your possessions once you’re no longer around to do it. You may also want a few people in charge of different tasks, such as somebody handling the role of power of attorney, which means they’re in charge of making your legal or financial decisions if you’re alive but unable to do so.
Lindsay Graves, an elder law attorney and founding partner at the Graves Law Firm in North Canton, Ohio, cautions people to be careful when assigning roles like the power of attorney and executor of a will to your children, or nominating the oldest child to do everything.
“Having the wrong person in a role can lead to conflict rather than clarifying and simplifying the plan for everyone involved,” Graves says.
In other words, mull this over before making a decision.
Here are 4 questions to answer right now. We mean it. Write these answers down and email them to yourself.
- Who in the next generation do I trust?
- Who in the next generation is the most organized?
- Who in the next generation knows my wishes and will respect them?
- Who in the next generation is the best communicator or best diplomat?
Go with your gut answer now, but circle back to these and consider a bit more before settling on your financial decision.
Make a List of Your Financial Accounts (and Passwords)
So you’ve made a list of all the valuables that you want your family or friends to have. Good. But you should also be working on a list of the wealth in various accounts, such as a 401(k) plan or an IRA. If you have a life insurance policy that beneficiaries will need to know about, you’ll want to add that to the list. Whoever has your power of attorney will eventually need to be able to access this and will need to know where to find the passwords to all of your accounts, checking, savings and so on.
“That’s very important,” Graves says. She explains that often, people don’t think about passwords. “They have a variety of accounts and investments that no one else knows how to access,” she says.
This list can be hard, especially if you have old accounts, like an old 401(k), floating around. For this exercise, spend 3 minutes creating a calendar appointment where you promise yourself you’ll sit down and do this work. Reschedule if you have to, but DON’T let this appointment fall off your calendar!
Write a Will
Your executor isn’t going to know what your wishes are, unless it’s clearly spelled out in writing. In theory, you can verbally tell an executor what you’d like done, but that isn’t likely to hold up in court. If you want a guarantee that things are going to work out the way you hope they will, you need to set up a will.
That could mean going to an estate planning attorney or finding an online, reputable software program to draft the will. But, you have to do this right. Don’t create a Word document with some wishes on it and hope that it will suffice. Odds are, it won’t.
“Everyone needs a will,” Mitchell says. “People who expect that they will not have enough personal income or resources, and so will need to qualify for public benefits like Medicaid, should meet with a lawyer to learn what they need to do in addition to estate planning.”
For this task, use 5 minutes and think of a person you trust that will hold you accountable. Now, text or call them and ask them to be your accountability partner. Tell them the deadline when you plan to complete or update your will and that you’d like them to hold you accountable. In exchange, you can compensate them in a non-monetary way, such as serving as their accountability buddy for something that they’ve been meaning to do.
Consider Creating Other Documents
In addition to choosing your power of attorney and writing your will, you may also want to create a living will, which is a written, legal document that explains what medical treatments you want if you’re in a situation where you’re incapacitated, like a coma. You might also want to create a healthcare proxy, which is a document that names somebody you trust to make healthcare decisions for you. It’s similar to the power of attorney role, but it doesn’t involve legal and monetary decisions.
If any of these documents caught your eye, go ahead and use one of the above methods to make sure you get started, including making a calendar appointment or asking someone to be your accountability buddy.
15 Minutes Are Over, But You Need To Keep Chipping Away
If you’ve faithfully followed our 15-minute plan, you’ve created momentum to get your plans in order. Congratulations! Keep it up.
“Because estate planning is not a fun topic, I find that people put it off far too long — usually until something happens that causes them to make sure they have something, anything set up,” Graves says. The problem with delaying putting together an estate plan is that if you’re doing it when you’re ill or injured, your options on what you can do may be limited.
This leads us to our last hack, having a purpose beyond your own benefit. If you have children, grandchildren or pets, you probably want to leave them as much wealth as possible, whether that’s actual treasure or simply treasured souvenirs you picked up during a well-lived life.
“We spend decades saving, investing and planning for retirement only to get there and realize that taxes, medical costs, market volatility and inflation, just to name a few, are threatening to take away what we have worked so hard for,” Graves says.
Yes, Graves is correct. Earning wealth, and keeping it, is hard enough. It would be a shame if your family wasn’t able to reap the benefits of your hard work simply because your estate plan wasn’t in order.
So if you find yourself lagging in enthusiasm, use these hacks to start making progress again. You want to leave your loved ones with a legacy — not a financial and legal mess that they’ll have to clean up.
About Geoff Williams