Estate Planning Essentials

Six Steps to Help You Protect Your Family’s Financial Future:

Your Estate Planning Checklist

Christopher Juillet, Attorney at Law

One of the most common questions I get from prospective estate planning clients is this: “Do you have a checklist?” I tell them I do. Here it is.

Step 1—Meet with an Experienced Estate Planning Attorney to Get Started

During the initial estate planning consultation, I meet with clients with three goals in mind. First, I ask my clients to “tell me their family story.” I want to learn about their family, their financial situation, their needs, and what they want to accomplish with their estate plan. Second, I spend a few minutes explaining some of the various mechanisms available to accomplish their goals, so they have a good idea about:

• What a will does.
• What a trust does.
• Why trust funding is vital if a trust is an appropriate approach to their situation.
• How durable powers of attorney work.
• Why medical powers of attorney are important.

Finally, once I have a good idea of that they have and what they need, I make recommendations to accomplish the goals they’ve set out.

Step 2—Identify the “Cast Members”

Before I can begin to draft the necessary documents, I need to know:

• Who the clients want to receive their assets (the beneficiaries for a trust, devisees for a will).
• Who will be responsible to administer the estate (personal representative for a will, successor trustee for trust).
• Who they wish to nominate to serve as guardian and conservator for their minor children.
• Who they want to designate as their financial agent for their durable power of attorney.
• Who they want to designate as their patient advocate for their medical care powers of attorney.

In addition to names, I always ask for addresses and telephone numbers. That way, I can include that information as appropriate so it is readily available when needed.

Step 3—Draft, Review and Execute Estate Plan

Mostly, this work is on me. I draft the documents and include the relevant information. I’ll call or email to get additional information as needed. Once the estate plan is completed, it includes:

• Synopsis and letters of instruction—to provide guidance to the personal representative or successor trustee.
• Revocable living trust—generally the best way to hold assets and avoid probate court administration and oversight.
• Estate tax sheltering trusts, if needed—to reduce or eliminate estate tax. Granted, this is not much of an issue these days, as the Federal estate tax does not affect most estates, with the current (2019) exclusion in excess of $11.4 million.
• Education, special needs, pet care trusts (if needed)—to help ensure proper handling of special situations, particularly those involving “blended” families, families with disabled persons, and families who want to ensure their pets, whether dogs, cats, horses or large birds, are properly cared for.
• Wills and lists of gifts—to help ensure that assets are property distributed according to each client’s wishes.
• Funeral representative designation—to nominate a person to make funeral decisions when the time comes.
• Basic funding documents—to assign personal assets to the trust, as well as assign interests in real estate, business interests.
• Warranty deeds—to transfer ownership in Michigan real estate to the trust.
• Durable powers of attorney—to provide a mechanism for others to conduct a client’s business at that client’s direction.
• Durable powers of attorney for health care—to designate a person as patient advocate to make health care decisions when the client is unable to do so.
• Advance medical care directives—to allow clients to specify what level of medical care they wish to receive.
• Durable powers of attorney for medical records release—to designate a person to receive medical records.

Once the documents are prepared, I’ll contact the client to arrange for a meeting to review the plan. At that meeting, we’ll go over the plan specifics and address any questions that come up. Once the plan is ready, we schedule a meeting to sign the documents.

Step 4—Re-title Assets to Trust

Having a trust without assigning assets to the trust is one of the biggest estate planning mistakes known to client and attorney alike. Once an estate plan involving a trust is completed, the very first task is to “fund” the trust. What is “trust funding”?

Simply put, it is assigning all assets to the trust through a variety of ways. A more complete discussion of this process appears in another post, but basically, it means making sure that everything the client owns is re-titled to or otherwise directed to the trust. I do some of this and advise clients on how to work with their bankers and financial advisers to do the rest. Such assets generally include:

• Brokerage account, stocks, bank accounts—can be directed to the trust, either re-titled to the trust or directed using a POD (pay on death) or TOD (transfer on death) designation.
• Real estate—can be deeded to the trust, generally using a warranty deed. 
• Life insurance benefits—can be directed to the trust using beneficiary designations.
• IRA, 401(k), 403(b), and other pension plans can be directed to the trust using beneficiary designations.
• Business interests can be assigned to the trust, assuming that the business bylaws or operating agreements do not prohibit this.

Step 5—Meet Periodically with Attorney for “Check-Up"

Over time, things change. People move away. People pass away. It’s important to meet with your estate planning attorney from time to time to discuss what, if any, changes need to be made to help ensure that your estate plan continues to be able to accomplish your goals. Indeed, your goals themselves may change, requiring the documents to be updated. Some of the items that may need to be updated can include:

• Updating IRA, 401(k), 403(b), pension plan beneficiary designations.
• Updating insurance beneficiary designations.
• Updating successor trustees, personal representatives, agents, patient advocates.
• Updating contact information.
• Revising documents as needed.

Some of the life events that may trigger the need to consider estate plan updates can include:

• Death of a spouse or child
• Marriage
• Divorce
• Death or relocation of persons names as successor trustees, personal representatives, agents, patient advocates
• Purchase or sale of assets

Step 6—Sleep Well

Once you’ve taken these vital steps to help ensure your family’s financial future, you can sleep soundly, secure in the knowledge that you have done your best to plan ahead to minimize the hassle, grief and expense of transferring wealth when the time arrives.

Remember that an estate plan is not simply a “piece of paper,” it’s peace of mind. There is no better time than today to help secure your family’s financial future with a comprehensive estate plan.

For more information or to get started on this important life project, visit www.ArborEstatePlanning.com or contact me at [email protected] or 734-827-9450. I’ll help you plan ahead.