Estate Planning 101: Understanding the first steps

Essential steps for estate planning

Aside from making sure your will and advanced care directive are up to date, there are a few things that will get your estate in order and make your passing easier on your loved ones. While gathering this information, it’s a good idea to discuss your plans with the executor of your will, your lawyer or financial and tax advisers.


1. Make sure your insurance is in order

Meet with your insurance agent to update (or buy additional) life insurance. It’s important to meet with your agent every few years to review your beneficiary and coverage amount to make sure your policies still reflect your needs and wishes. Life insurance provides an immediate source of cash that can be exempt from federal and state income tax (but, in general, not estate taxes).

You may also want to consider buying long-term care insurance. Medical expenses can add up quickly and long-term care insurance can help protect your assets. It also enables you to cover the cost of long-term health care in your home or at a long-term care facility.


2. Organize your financial records

Just like your life insurance, the status of your IRA, 401(k) and other retirement plans need to be reviewed occasionally for beneficiary arrangements and benefits.

Once you’ve reviewed all your financial records, create a list of all your insurance policies and financial accounts. Be sure to include account numbers for investment and bank accounts and policy numbers for disability, homeowners, credit and life insurance that you might have. And be sure to remember credit card accounts, loans, mortgages and other financial holdings that might be important.

This includes other sources of income, like pensions, military benefits and Social Security. If you store any information on your computer or online, make a list of all usernames and passwords and where the information can be found. List all organizations in which you have a membership. They may provide special death benefits and should be noted for your survivors to contact if appropriate.


3. List the location of valuable documents.

Your list should include tax records, deeds, car titles, military records, birth and marriage certificates, divorce decrees and estate planning documents.  This can include your Social Security number, driver’s license number, VA claim number, your date of birth and the names and phone numbers of family members.

If you have a safe-deposit box, make arrangements to give access to your executor. In many states, safe-deposit boxes are closed upon death and are not opened until probate. Make sure copies of your will and other important documents are available outside of your safe-deposit box, like at your attorney’s office.

For questions regarding estate planning laws, contact the Law Office of Michael Craig and we’ll be glad to assist you.