About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C., area who works with clients virtually across the country. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals in their 30s and 40s take control of their finances and fulfill their dreams. Feel free to schedule a Free Consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals.
The older we get, the more critical it is to ensure our affairs are in order and have an estate plan. But what exactly is an estate plan, and what should be included?
Estate planning is a topic that is commonly ignored. After all, who likes to plan for what happens after they die? Most people have no Estate Plan in place and often don't know where to start. This checklist will give you a better idea of what questions to ask when creating your estate plan and clarify what will happen to your assets after you're gone. This checklist covers the key issues to consider when developing your Estate Plan, such as:
- Identifying the appropriate estate planning documents needed for your situation.
- Considering ways for your assets to avoid probate.
- Developing an equitable estate plan that is fair to all heirs involved.
Estate Plan Basics
An estate plan is the management and organization of your assets should you pass away. It also includes documentation determining who can make medical and financial decisions should you become incapacitated.
Most people think that estate planning just includes a will. While a will is a beneficial document, other documents should be included in your estate plan.
- A will (also called a last will and testament) specifies how you want your estate to be distributed. Besides dividing up your assets, a will also appoints guardianship for minor children. This last item is essential to designate; you don’t want a court determining who your children should live with in the event of your death. If your estate includes a revocable trust, a will is still needed. Called a “pour-over will,” the goal of this document is to cover any assets that may have not made it over to the trust.1
- An advanced medical directive (medical power of attorney) establishes who can make medical decisions for you should you become unable to do so. A medical power of attorney also allows you to designate a conservator should you become mentally incapacitated.1
- A living will details to your physicians what type of care you want to receive at the end of your life when you face a terminal illness or are in a vegetative state. Do not resuscitate (DNR) and do not intubate orders are listed here. While a last will and testament is designed to specify your wishes upon your death, a living will determines what happens to you while you’re still alive.1
- A financial power of attorney, much like a medical power of attorney, appoints someone to handle your financial affairs should you become unable to do so. There are two different types of financial powers of attorney: a durable power of attorney and a springing power of attorney. A durable power of attorney goes into effect as soon as the documents are signed, whereas a springing power of attorney only goes into effect if you become mentally incapacitated.1
- A revocable living trust is a more detailed document that details not just what happens after you’re gone or incapacitated but what happens while you’re alive, too. At its core, a revocable trust is a vehicle to hold your assets; meaning that until assets are moved over, it’s essentially just an empty vessel. If you have a more complicated estate, a revocable living trust can help manage a variety of assets and beneficiaries. As the trustee, you’ll still have control over your assets while they’re in the revocable living trust, and assets held in the trust will avoid probate after your death.1,2
We have partnered with a leading Estate Planning platform to deliver Estate Planning documents for a fraction of the cost of working with an attorney. In conjunction with our partner, we'll provide a complete estate planning experience in a collaborative fashion. We'll be able to facilitate, create, visualize, maintain, and ultimately administer your Estate Plan.
Revocable Living Trust-Based Estate Plan
- Individual - $1,600
- Couple - $2,100
Will-Based Estate Plan
- Individual - $900
- Couple - $1,400
Estate planning is a critical aspect of the financial planning process. Reviewing a client’s documents is an important exercise, both at the outset and throughout the advisory relationship. However, this can be a daunting task for most individuals, who may find the exercise tedious and, perhaps, confusing.
To help guide your document review, we have created this checklist. It covers key considerations regarding the most common estate planning documents, including:
- Living Trusts
- Irrevocable Trusts
- Powers of Attorney
- Living Wills
This checklist covers 19 of the most important planning issues to identify and consider before you update your estate plan. It’s structured as follows:
- Beneficiary & Fiduciary Issues
- Assets & Property Related Issues
- Minors & Children Related Issues
- Other Issues
Estate plans are a necessary part of life, albeit one that no one really wants to think about. But having an estate plan is one of the kindest things you can do for your loved ones. You’ll gain peace of mind knowing that your family is taken care of, no matter what life throws at you.
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Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report we already generate for clients and our work with the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.
Paying for College
This service is an ideal fit for parents of high school juniors and seniors with a standardized test score (ACT/SAT) and a list of colleges they're considering. This is included as part of ongoing financial planning or as a stand-alone package. This service includes:
- A college affordability assessment
- How Much Colleges Think You Can Afford (EFC)
- If You Qualify for Need-based Grants
- If You Qualify for Merit-based Scholarships
- Help you search for scholarships
- 1 Year Out of Pocket Cost (For Each College)
- 4 Year Out of Pocket Cost (For Each College)
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