Tips for Preparing Your Estate Plan

As a followup to my earlier post about needing a will, I ran across a list of tips for preparing your estate plan. Among the twelve easy steps are…

(1) Prepare a will (duh!).
(2) If you’re 21 or older, make sure that you have a durable power of attorney and a health care proxy.
(3) Use estate planning software to make initial preparations (getting your ducks in a row saves billable hours). Even if you use such software to prepare your final documents yourself, make sure you have your attorney review them.
(4) Get your will notarized with the proper number of witnesses (check local laws) — and don’t have a beneficiary sign off as a witness.
(5) If you already have an estate plan, review and update it whenever you have a change of family status.
(6) Make a list of all assets and liabilities.
(7) Name an executor, and make sure they’re up to the task.
(8) Choose a guardian for your kids.
(9) Have only one set of signed, notarized documents. Keep copies for your files.
(10) Review your estate plan every few years and update as necessary. Even if you situation hasn’t changed, the laws might have.
(11) Don’t keep insurance policies in your safe deposit box — this delays filing for a death benefit.
(12) Make sure you have the right type of joint ownership for jointly owned assets.

I’ve actually heard that #11 applies to things like your will, too. In many states safe deposit boxes are sealed upon the owner’s death, and you may need a court order to open them — the IRS likes to peak inside, too, as stuffing a safe deposit box full of cash is a great way to avoid estate taxes. Locking your will inside slows everything down because there’s no accessible, legally binding record of the executor, etc.