The first step of forming your estate plan involves one thing: getting started. You may be avoiding it because you feel overwhelmed. But like any big project, you have to start somewhere. In the end, you’ll have a thorough, complete estate plan that will protect your interests, follow your wishes, and make sure the beneficiaries you designate receive what you bequeath to them.
Your spouse, your children, and your family and friends who may have to pick up the pieces if you are suddenly disabled, declared incompetent, or pass away without warning. An estate plan will make that much easier for them.
If you’ve put off your estate plan because it’s too much think about, we offer you a checklist to start with so that it’s not intimidating. Begin gathering up the necessary information to start your estate planning process before you make an appointment.
Estate Plan Basics
Of course, we start with things like your name, address, date of birth, email address, phone number and other contact information are standard, as well as your current spouse’s name, names of any previous spouses, major health problems you may be experiencing, and your current occupation and salary.
Include:
- Last year’s complete individual and business federal income tax return and W2
- Your existing wills, trusts and powers of attorney
- Prenuptial agreement and/or divorce decree (if applicable)
- A statement of benefits from your employer
- Statements and beneficiary designations for each retirement account (IRA, 401k, etc.)
- A list of your children and other dependents, along with their addresses, contact information and what you’ve saved for their education. Include children from previous relationships.
- If any of your children are adopted, include their adoption papers
- Indicate if any of your children have any health problems, physical or mental disabilities, or special needs.
Your Primary Home
You’ll need:
- The deed for your home
- How the home is held (i.e., joint ownership, tenancy, etc.)
- Date of purchase and purchase price
- Mortgage balance, if any
- Estimated present value of the home
Other Real Property
For any additional real estate, you’ll need:
- The location (city, state, etc.)
- How it’s owned (joint with spouse, tenancy, etc.)
- Date you bought it
- Purchase price
- Source of funds used to purchase it
- The property’s estimated present value
Asset And Retirement Information
Collect information for your:
- Bank accounts, including
- Bank name
- Type (checking, savings, etc.)
- Current balance
- Owners (you, jointly with your spouse and/or children, etc.)
- Stocks, bonds and/or mutual funds
- Name
- Institution
- Amount
- Owners (you, jointly with your spouse and/or children, etc.)
- Ownership in Closely Held Businesses (non-publicly traded)
- Name of business
- Percentage owned
- Type of entity (LLC, etc.)
- Book value (provide your latest business tax return)
- Market value of your percentage of the business
- Value of the separate accounts receivable
- Total value of any real estate
- Whether or not there is a buy/sell agreement
- Notes and Loans Receivable made to family members
- Borrower, amounts loaned, owed, paid, current balance, and interest rate
- Do you expect repayment?
- Pensions and IRAs
- Companies, types, owners
- Present values
- Annual contributions
- Beneficiaries
- Life Insurance
- Policies, companies, amounts, beneficiaries
- Other insurance, including companies, coverage, and annual premiums:
- Auto
- Life
- Disability, including the percent of your salary that it would cover
- Long-term disability, including the amount it would pay for in-home and nursing home care
- Liabilities you owe to others
- Amount, date, owner, paid, current balance, interest rate, due date of final payment
Financial Goals
Consider your goals for this year, and the amount of money they will require. These goals may include:
- Increasing your cash flow
- Building an emergency cash reserve
- Paying off credit card balances
- Save for a new car down payment
- Replenish cash reserves after unexpected medical bills
- Begin contributions to a 401(k) at work
- Being saving for college with a 529 or Coverdell savings account
Naming Guardians, Trustees, Etc.
Consider the people you would like to handle certain aspects of your estate after you’ve gone. Are they qualified? Would they be able to do the job effectively, especially during a time of great emotional distress?
Along with the names, you’ll need their address, (city/state/zip), as well as their relationship to you.
- The guardian for your minor children—this could be a relative, such as a sibling, aunt, uncle, friend, parent, etc.
- Successor guardian, should the named guardian be unavailable
- Trustee and successor trustee
- Agent and successor agent under power of attorney
- Agent and successor agent under healthcare power of attorney
Consider who will receive your property if you die without descendants. You could name a relative, a friend, or a charity of your choosing.
Additional Questions
Other topics to consider:
- Do you want to avoid probate?
- Do you have property in another state?
- Do you want to protect your assets from future creditors, such as those from divorce or a lawsuit?
- Do you want to make gifts to charity?
- Have you gifted anyone more than $13,000 in any year?
- Would you like to have your tax returns reviewed?
- Do you want to be an organ donor?
- Have you co-signed any loans for another person (i.e., a child or sibling), or pledged assets for a debt?
- Do you believe your beneficiaries can handle the assets you plan to give to them?
- Do you want to help protect their inheritance from future creditors, such as due to divorce or lawsuits?
- Would you like help planning for long-term medical care expenses?
- Do you expect to receive an inheritance in the future? If so, how much?
- Have you and your spouse ever lived in any of these states, or own property in them?
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- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
Who will handle your online and digital assets? This includes your social media accounts, such as Facebook, Twitter, Instagram, LinkedIn, etc., as well as email accounts, any websites you own, and any other online digital property. Your survivors and/or beneficiaries will need the passwords in order to access these accounts. Some sites, like Facebook, allow you to name a “legacy contact” in order to handle your accounts in the event of your passing.
We hope this list makes the idea of an estate plan less daunting and easier to get started.
Review Your Estate Plan Regularly
Life changes over time, so we recommend that you review your estate plan every three to five years to make sure everything is up to date and works with current estate laws.
If you have you have any major life changes that affect your estate plan, such as having or adopting a child, getting married or divorced, becoming widowed, purchasing or selling assets or property, or other changes that affect your plan, review it with your estate planning attorney at that time to make sure it’s updated accordingly.
Your Chicago Estate Planning Attorney
James C. Provenza is a leading Illinois estate planning attorney with years of experience helping clients with estate planning to make sure their wishes are carried out. Call our firm today at (847) 729-3939, or use our online contact form.
