This pre-death checklist will help get your affairs in order
1. List your physical assets
To start things out, go through the inside and outside of your home, and make a list of all valuable items. Examples include the home itself, television sets, jewelry, vehicles, art and antiques, computers or laptops, lawn equipment, and power tools. If you own it- list it!
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The list will probably be a good deal longer than you may have expected. As you go, you may want to add notes if someone comes to mind that you’d like to have the item after your death.
2. Follow with Non-Physical Assets
Next, start adding your non-tangible assets to your list, such as things you own on paper or other entitlements that are predicated on your death. Items listed here would include brokerage accounts, 401(k) plans, IRAs, bank accounts, life insurance policies, annuities, US Savings bonds and any other assets in a safe deposit box. Include all account numbers and list the location of any physical documents you have in your possession. You may also want to list contact information for the firms holding these non-physical possessions.
3. Assemble a List of Debts
Then, make a separate list for open credit cards and other obligations you may have. This should include items such as auto loans, mortgages, home equity lines of credit, and any other debts you might owe. Again, add account numbers, the location of signed agreements, and the contact information of the companies holding the debt.
Include all your credit cards, noting which ones you use regularly and which ones tend to sit in a drawer unused.
It’s generally a good practice to run a free credit report at least once a year. This will also identify any credit cards you may have forgotten you have.
4. Make Copies of Your Lists
When your lists are completed, you should date and sign them and make at least three copies. The original should be given to your estate administrator (more on that person later). The second copy should be given to your spouse (if you’re married) and placed in a safe deposit box. Keep the last copy for yourself in a safe place.
5. Review Your Retirement Accounts
Accounts and policies that have designated beneficiaries will pass directly to those people or entities upon your death. It does not matter how you direct that these accounts or policies be distributed in your will or trust. The beneficiary designations associated with the retirement account will take precedence.
Contact your employer’s customer service team or plan administrator for a current listing of your beneficiary selection for each account. Review each of these accounts to make sure the beneficiaries are current and listed exactly as you like. This is especially important if you have divorced and remarried.
6. Update Your Insurance
As with retirement accounts, life insurance and annuities will pass directly to beneficiaries. It is important to contact all life insurance companies where you maintain policies to ensure that your beneficiaries are up-to-date and listed correctly.
7. Assign Transfer on Death Designations
Assets bequeathed in a will often go through probate, as do assets if someone dies intestate. This process, in which your assets are distributed per court instruction, can be costly and time-consuming.
However, many accounts, such as bank savings, CDs, and individual brokerage accounts, are unnecessarily probated every day. If you hold these accounts, they can be set up—or amended—to have a transfer on death (TOD) designation, which lets beneficiaries receive assets without going through the probate process. Contact your custodian or bank to set this up on your accounts.
8. Select a Responsible Estate Administrator
Your estate administrator or executor will be in charge of administering your will when you die. It is important that you select an individual who is responsible and in a good mental state to make decisions.
Don’t immediately assume that your spouse is the best choice. Think about how emotions related to your death will affect this person’s decision-making ability. If you foresee an issue, consider other qualified individuals.
9. Draft a Will, trust and maybe a pre-nuptial
Everyone over age 18 should have a will. It is the rulebook for the distribution of your assets, and it could prevent havoc among your heirs. Probate can be every expensive in some states so a Revocable Living Trust (RLT) can be a valuable option to avoid probate. In addition a PRE-NUPTIAL for seniors that are re-marrying at an advanced age.
10. Regularly Review Your Documents
Review your will for updates at least once every two years and after any major life-changing events (marriage, divorce, the birth of a child, and so on). Life is constantly changing, and your assets and wishes are likely to change from year to year, too. Make sure that you copy the person that will be handling your affairs.
After you’ve covered all your bases, it is a good idea to consult with a professional to double-check your plan. As you get older, your needs may have changed. You do need to simplify your finances. Don’t wait- don’t hope that all will be Ok.