Pennsylvania Action Lambda Society
P A L S - Serving the Lesbian, Gay, Bisexual and Transgender Communities of Eastern PA and Western NJ
Important to know: 1. Make a will. 2. Consider a trust. 3. Make health care directives. 4. Make a financial power of attorney. 5. Protect your children's property. 6. File beneficiary forms. 7. Consider life insurance. 8. Understand estate taxes. 9. Cover funeral expenses. 10. Make final arrangements. 11. Protect your business.
12 Simple Steps to an Estate Plan: A Checklist
Take care of your family by making a will, power of attorney, living will, funeral arrangements, and more.
In a will, you state who you want to inherit your property and name a guardian to care for your young children should something happen to you and the other parent. For more information, see The Simple Will: No Frills, No Fuss, No Anxiety.
If you hold your property in a living trust, your survivors won't have to go through probate court, a time-consuming and expensive process. For more information, see the Living Trust FAQ.
Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a health care declaration ("living will") and a power of attorney for health care, which gives someone you choose the power to make decisions if you can't. (In some states, these documents are combined into one, called an advance health care directive.) For more information, see The Living Will and Power of Attorney for Health Care: An Overview.
With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact (but doesn't have to be an attorney). For more information, see Financial Powers of Attorney: Do You Need One?
You should name an adult to manage any money and property your minor children may inherit from you. This can be the same person as the personal guardian you name in your will. For more information, see Leaving an Inheritance for Children.
Naming a beneficiary for bank accounts and retirement plans makes the account automatically "payable on death" to your beneficiary and allows the funds to skip the probate process. Likewise, in almost all states, you can register your stocks, bonds, or brokerage accounts to transfer to your beneficiary upon your death. For more information, see How to Avoid Probate.
If you have young children or own a house, or you may owe significant debts or estate taxes when you die, life insurance may be a good idea. For more information, see Do I Need Life Insurance? and Using Life Insurance to Provide for Your Kids.
Most estates -- more than 99% -- won't owe federal estate taxes. In 2011 and 2012, the federal government will impose estate tax at your death only if your taxable estate is worth more than $5 million. Also, married couples can transfer up to $10 million tax-free, and property left to a spouse (as long as the spouse is a U.S. citizen ) or tax-exempt charity is exempt from the tax. (For more information, see Estate and Gift Tax FAQ.)
Rather than a funeral prepayment plan, which may be unreliable, you can set up a payable-on-death account at your bank and deposit funds into it to pay for your funeral and related expenses. For more information on prepayment plans and alternatives, see The Prepaid Funeral and its Perils.
Make your wishes known regarding organ and body donation and disposition of your body -- burial or cremation. For more information, see Final Arrangements FAQ.
If you're the sole owner of a business, you should have a succession plan. If you own a business with others, you should have a buyout agreement. For more information, see Plan Ahead for Changes in Partnership Ownership .
1. Make a will.
2. Consider a trust.
3. Make health care directives.
4. Make a financial power of attorney.
5. Protect your children's property.
6. File beneficiary forms.
7. Consider life insurance.
8. Understand estate taxes.
9. Cover funeral expenses.
10. Make final arrangements.
11. Protect your business.