Your Estate Planning Checklist for 2022

By Tom Sedoric and Casey Snyder

A common misconception about estate planning is that one must possess an ungodly amount of money to justify it. The fact is that estate planning is helpful and important for everyone, not just the extremely wealthy. There’s no downside to having a plan for taking care of your hard-earned finances and assets after your death. With proper estate planning, your family will benefit greatly from not being left to figure out “what’s next,” and you can feel confident in knowing that probate court will not distribute assets contrary to your wishes. 

What Is Estate Planning? 

Estate planning is an essential, albeit morbid, undertaking meant to provide a plan for the management and disposal of your estate after your passing. It also permits specific family members (or an attorney) to act in the instance that you become incapacitated while still alive.

You may have already begun the estate planning process or have completed the process altogether. If you haven’t done anything yet, consider this your sign to buckle down and get it done. Without estate planning, you run the risk of saddling your family with expensive probate costs, avoidable attorney’s fees, assets distributed incorrectly, and a general disruption of your family harmony.

Whether you have an estate plan in place or not, take some time to review it to ensure everything is in place. Use this checklist in order to guide the process and set you up for success. 

Will Or Trust?

The first item on your estate planning checklist is a will or a trust. What’s the difference, you ask? A will is a legal document that spells out how you want your affairs handled and assets distributed after you die. In contrast, a trust is a fiduciary relationship in which a trustor (you) gives a trustee (fiduciary) the right to hold title to property or assets for the benefit of a third party. A trust is useful if you’re planning on leaving money to an underage relative, for example. It will also keep your family out of probate court, which can be expensive and time-consuming. 

If you die without a will or trust, the state government will step in to oversee your asset distribution. In order to divide assets, the courts follow a formula—potentially negatively impacting your surviving family members.

Power of attorney is another important document you’ll need to draw up to prevent the state from assigning someone at will to make decisions for you and your assets in the instance that you’re not mentally able to make those choices. The person you grant power of attorney to has the ability to transact real estate, enter financial transactions, and make other legal decisions in your stead. It’s most common for spouses to grant each reciprocal power of attorney, but you may also opt to give this power to siblings, children, friends, or trusted advisors. 

The healthcare power of attorney gives the person you designate the ability to make healthcare decisions in the event that you are incapacitated. Choose someone you trust who you know will make decisions with your wishes and best interest in mind. This person could quite literally hold your life in their hands, so take some time to carefully consider who to grant this power to.

Beneficiary Designations

Not all of your assets will be outlined in your will, so it’s crucial to set beneficiary designations in order to guarantee your funds will end up in the right hands. A beneficiary must be at least 21 years old and be of sound mind. Once again, if you haven’t named a beneficiary—let alone a contingent beneficiary—the courts will determine how to split up your remaining assets. 

Guardianship Designations

This is arguably one of the most critical parts of estate planning. Designating legal guardians for your children (or future children) ensures that they will be placed with someone of your choosing. We recommend choosing a close friend or relative who is financially stable; shares many of your viewpoints, ethics, and values; and is prepared to raise children. 

Even if you’re not a parent yet, we urge you to take this step seriously. The last thing you want is to put off this aspect of estate planning in the instance that the unthinkable happens. 

Letter Of Intent

The letter of intent goes to your beneficiary and outlines any additional wishes you may have. For example, you may have specific requests regarding your funeral or want a specific asset used in a particular way.

One important note on letters of intent—they are not considered valid in the eyes of the law. However, they help inform your beneficiary and probate judge of your intentions, so they can be a valuable piece of the estate planning puzzle.

If this checklist seems like a lot to handle, please don’t get discouraged or overwhelmed. An experienced fiduciary can help guide you through the estate planning process and offer advice and best practices as you go. Don’t hesitate to reach out to us for guidance.

The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.

Steward Partners Investment Solutions, LLC (“Steward Partners”), its affiliates and Steward Partners Wealth Managers do not provide tax or legal advice. You should consult with your tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, registered broker/dealer, member FINRA/SIPC, and SEC registered investment adviser. Investment Advisory Services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment adviser. Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC are affiliates and separately operated.

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