Utilizing a comprehensive estate planning checklist is crucial to ensure that no important aspects are overlooked. While many checklists emphasize the creation of fundamental documents such as a power of attorney, last will and testament, and healthcare proxy, a well-rounded estate plan demands a meticulous assessment of your unique goals, objectives, assets, and desired distribution methods. By carefully considering these elements, you can identify the most suitable estate planning instruments to effectively safeguard your legacy and provide for your loved ones. This comprehensive checklist serves as an essential guide for effective estate planning.

Identify Your Goals

The first step in an estate plan is to identify your goals and objectives. What is it that you want to achieve?

If safeguarding your assets against the potential need for long-term care in the future is a priority, then a Medicaid Asset Protection Trust should serve as the cornerstone of your estate plan.

Are you concerned about providing for a special needs child after your passing? A revocable trust offers an effective solution, allowing you to maintain control over your assets, bypass the probate process, and guarantee that your special needs child receives a steady income while preserving their eligibility for essential government benefits.

If you are contemplating marriage and desire to preserve your assets for children from a prior relationship, it's important to note that while a revocable trust can effectively segregate your assets and ensure they are distributed to your intended beneficiaries upon your passing, it is still regarded as a testamentary substitute. Consequently, the assets within the revocable trust will be factored into your estate when calculating your spouse's elective share.

Is your primary objective to avoid the probate process? In such instances, assigning beneficiary designations to certain assets can prove to be a suitable approach.

Are you looking to distribute your assets promptly upon your passing, or do you prefer to establish specific conditions that must be met before your beneficiaries can receive their inheritance? If your aim is to ensure a swift distribution of your estate, a well-crafted last will and testament can effectively accomplish this goal. Conversely, if you wish to impose certain stipulations, such as a beneficiary only gaining access to the principal of their inheritance once they reach a predetermined age or upon the occurrence of a particular event, then establishing a trust may prove to be the most advantageous approach.

Identifying your goals and objectives is paramount in determining the optimal combination of estate planning documents for your unique situation. To ensure that your estate plan effectively reflects your intentions, it is essential to consult with a knowledgeable legal professional. Our experienced team can provide personalized guidance on the most advantageous allocation of your assets, whether through trusts, beneficiary designations, or distribution via a last will and testament, tailored to your specific goals and objectives. Should you need assistance, call us at 212-233-1233 or email [email protected].

Inventory Your Assets

After establishing your goals and objectives, create a comprehensive inventory of your assets, encompassing bank accounts, investments, real estate, and personal property.

For bank and investment accounts, prepare a detailed list of all checking, savings, money market, brokerage, and retirement accounts, such as 401(k)s and IRAs. Record the name of the financial institution, account number, and any joint ownership arrangements, transfer-on-death (TOD) designations, or named beneficiaries.

Create a comprehensive inventory of all real estate holdings. For each property, write the full address, ownership structure (such as sole ownership, joint tenancy, or tenancy in common), and pertinent mortgage information. Secure copies of the corresponding deeds and gather all applicable property tax records to supplement your documentation..

Create an inventory of valuable personal property, such as vehicles, jewelry, artwork, collectibles, and furniture. Include a description of each item, its estimated value, and any relevant documentation (e.g., appraisals, receipts).

List all digital assets, including email accounts, social media profiles, online storage accounts, and cryptocurrency holdings. Login credentials and any necessary access information (e.g., security questions, two-factor authentication details) can be made in a separate letter of instruction locked in a bank safety deposit box.

Document any ownership stakes in businesses, partnerships, or sole proprietorships. Include the name of the business, ownership percentage, and any relevant legal agreements (e.g., buy-sell agreements, operating agreements). Record any intellectual property owned, such as patents, trademarks, or copyrights.

List all life insurance policies, including term life, whole life, and group policies. Record the name of the insurance company, policy number, death benefit amount, and beneficiary designations.

Finally, document any other assets not covered in the previous categories, such as timeshares, club memberships, or intellectual property. Include relevant details, such as ownership information, value, and any associated legal documents.

Compiling a comprehensive inventory of your assets, even for informational purposes, can provide valuable insights to your estate planning attorney in identifying the most effective strategies for transferring ownership of these assets upon your passing, tailored to your unique goals and objectives. Moreover, maintaining well-organized ownership documents will significantly streamline the process for your executor when identifying and managing your assets after your death, ensuring a smoother administration of your estate.

Basic Estate Planning Documents

Estate planning checklists typically recommend crafting a last will and testament, a springing power of attorney, and a healthcare proxy as foundational documents. Understanding the nuances and key considerations for each of these critical components will provide clarity on the factors to contemplate when creating your comprehensive estate plan.

Creating a Will

Designate an executor and alternate to manage your estate by choosing a responsible and trustworthy individual to serve as your executor. Consider family members, close friends, or professionals (e.g., attorney, accountant), and evaluate their ability to handle complex financial and legal matters. Discuss your decision with your chosen executor and alternate, ensuring they understand the duties and time commitment involved. Provide them with a copy of your will and other important documents, and consider compensation for their services, if appropriate.

Specify beneficiaries for your assets by clearly identifying each beneficiary by their full legal name and relationship to you. Include date of birth and contact information, using specific language to avoid ambiguity (e.g., "my daughter, Jane Doe, born on January 1, 1990"). Be specific about which assets each beneficiary should receive, describing the asset in detail, including account numbers, property addresses, or identifying characteristics. Specify the percentage or fraction of the asset to be distributed to each beneficiary.

Specify if assets should be held in trust until a beneficiary reaches a certain age, and provide guidelines for the use of funds, such as for education, healthcare, or general support.

Consider alternate beneficiaries in case your primary beneficiaries predecease you or are unable to receive their inheritance. Provide the order of succession for alternate beneficiaries, using clear language to describe the circumstances under which alternate beneficiaries would inherit.

Establish Healthcare Documents

A healthcare proxy authorizes someone to make medical decisions if you're unable. Choose a trusted individual to serve as your healthcare agent, such as a family member or close friend. Select someone who understands and respects your medical preferences and discuss your decision with your chosen healthcare agent to ensure they are willing to take on the role.

Grant your healthcare agent the authority to make decisions on your behalf. Specify the extent of their decision-making power, such as the ability to consent to or refuse medical treatments. Outline your preferences for medical treatments and end-of-life care. Specify your wishes regarding life-sustaining measures, such as artificial nutrition and hydration, mechanical ventilation, and cardiopulmonary resuscitation (CPR). Indicate your preferences for pain management and comfort care. Consider including your preferences for organ and tissue donation.

Execute the healthcare proxy in accordance with New York law. Sign and date the document in the presence of witnesses and have it notarized. Provide copies of the executed healthcare proxy to your agent, family members, and healthcare providers.

Create a Power of Attorney

A springing power of attorney is a basic estate planning document, giving an agent the authority to manage your financial affairs if and when you become mentally incapacitated. Choose a trusted individual to serve as your attorney-in-fact or agent. Consider a family member, close friend, or professional (e.g., attorney, accountant) and select someone who is responsible, financially savvy, and capable of handling complex matters. Discuss your decision with your chosen agent to ensure they are willing to take on the role.

Execute the power of attorney in accordance with state laws by signing and dating the document in the presence of witnesses and having it notarized. Provide copies of the executed power of attorney to your agent and family members. A power of attorney avoids guardianship proceedings in case you become mentally incapacitated.

Consider Trusts

A revocable living trust allows you to maintain control over assets during your lifetime, provides flexibility to amend or revoke the trust as needed, ensures privacy and avoids probate upon your death, and enables you to name a successor trustee to manage the trust if you become incapacitated. For example, you could create a revocable living trust and transfer your home, investments, and bank accounts into the trust.

An irrevocable asset protection trust can be a powerful tool in your estate planning arsenal. By transferring assets into this type of trust, you effectively remove them from your estate, potentially minimizing estate taxes and shielding the assets from creditors and legal claims. However, it's important to understand that once you place assets in an irrevocable trust, you relinquish control over them, and the trust cannot be easily modified or revoked. For instance, you might choose to establish an irrevocable trust and fund it with a portion of your investment portfolio, safeguarding those assets from potential creditors while still allowing them to grow for your beneficiaries.

Like a power of attorney, a trust avoids guardianship proceedings in cas eyou become incapacitated. Consult an attorney on which type of trust best meets your needs.

Name Guardians for Minor Children

When bequeathing assets to minors in your will, it is crucial to designate a guardian to oversee the inheritance, thereby avoiding the need for separate guardianship proceedings. Under New York law, any child set to receive more than $10,000 must have a court-appointed guardian. By naming a guardian in your will, the Surrogate's Court can appoint the designated individual once the will is admitted to probate. Failure to specify a guardian in the will necessitates the filing of separate guardianship proceedings to appoint a guardian who can receive and manage the inheritance on the minor's behalf.

Review and Update Beneficiary Designations

If you want to avoid probate, review and update beneficiary designations to ensure they are up to date on all applicable accounts, such as retirement accounts (e.g., 401(k)s, IRAs, pensions), life insurance policies, and transfer-on-death (TOD) or payable-on-death (POD) accounts. Update designations as needed, especially after major life events like marriage, divorce, or the birth of a child. Modify designations to remove deceased beneficiaries and replace them with new designations, adjusting them to align with your current estate planning goals. Consider the implications of beneficiary designations, understanding that they supersede instructions in your will.

Consider Tax Implications

When crafting your estate plan, it is essential to carefully evaluate the potential tax consequences. Engage in a thorough discussion with your estate planning attorney regarding the intricacies of federal and state estate and gift tax exemption thresholds. Bear in mind that New York's estate tax exemption is comparatively lower than the federal exclusion amount, and the state employs an estate tax cliff provision. Seek guidance from your estate planning lawyer to fully comprehend the nuances of tax basis treatments, such as original basis versus stepped-up basis, as they pertain to revocable and irrevocable trusts. Regularly assess and modify your estate plan to guarantee its continued alignment with the most current tax legislation and your personal objectives.

Organize Important Documents

To ensure the security and accessibility of your essential estate planning documents, such as wills, trusts, deeds, policies, and financial records, consider storing the original copies in a premium, robust fireproof and waterproof safe at your residence or securing a safety deposit box at a trusted bank or financial institution. Develop a comprehensive master document that catalogues the precise location of all crucial documents, including the whereabouts of your safe or safety deposit box, along with any necessary access instructions or codes. Additionally, record the location of any documents entrusted to your attorney, financial advisor, or other professionals, furnishing their names and contact details for seamless communication and retrieval.

Preparing an estate plan can be a complex task requiring knowledge and wisdom from an experienced estate planning attorney. Should you need assistance in preparing your estate plan, the Law Offices of Albert Goodwin are here for you. We are located in Midtown Manhattan, New York, NY. Call us at 212-233-1233 or email [email protected] to schedule a consultation.