While many of us like to think that we're immortal, the only two things in life that are certain are death and taxes, to paraphrase Ben Franklin. Not only is it important that you have a plan in place in the unlikely event of your death, but you must also implement your plan and make sure others know about it and understand your wishes. Lest, as Franklin also said, "by failing to prepare, you are preparing to fail."
If you've procrastinated on your estate planning, here's a list of tasks to get you going in the right direction:
Must-do No. 1: Inventory physical items.
Go through your home and make a list of all items worth $100 or more. Examples include the home itself, television sets, jewelry, collectibles, vehicles, guns, computers/laptops, lawn mower, power tools and so on.
Must-do No. 2: Inventory non-physical items.
Add up your non-physical assets. These include things you own on paper or other entitlements, including brokerage accounts, 401k plans, IRA assets, bank accounts, life-insurance policies and all other insurance policies such as long-term care, homeowners, auto, disability, health and so on.
Must-do No. 3: Make a list of credit cards and debts.
Make a list of open credit cards and other debts. This should include auto loans, existing mortgages, home equity lines of credit, open credit cards with and without balances and any other debts. A good practice is to get a free credit report once a year and make sure you close out any credit cards that are no longer in use.
Must-do No. 4: List organizations you belong to and charities you support.
If you belong to organizations such as AARP, The American Legion, veterans' associations, AAA auto club, college alumni groups, etc., you should make a list of these. Include any other charitable organizations that you proudly support or make donations to. In some cases, several of these organizations provide accidental-death life insurance benefits (at no cost) for their members and donors, and your beneficiaries may be eligible. It's also a good idea to let your beneficiaries know which charitable organizations are close to your heart.
Must-do No. 5: Send a copy of your lists of assets to your estate administrator.
When your lists are completed, you should date and sign them and make at least three copies of each. The original should be given to your estate administrator (we'll talk about him or her later), the second copy should be given to your spouse or another loved one and placed in a safe deposit box, and the last copy you should keep for yourself in a safe place.
Must-do No. 6: Review IRA, 401k and other retirement accounts.
Accounts and policies in which you list beneficiary designations pass via "contract" to the person or entity listed at your death. It doesn't matter how you list these accounts and policies in your will or trust, because the beneficiary listing will take precedence. Contact a customer-service representative or your plan administrator for a current listing of your beneficiary selection for each account. Review these accounts to make sure the beneficiaries are listed correctly.
Must-do No. 7: Update life insurance and annuities.
Life insurance and annuities will pass by contract as well, so it's important to contact all life-insurance companies with which you maintain policies to ensure that your beneficiaries are listed correctly.
Must-do No. 8: Assign transfer-on-death designations.
Many accounts, such as bank savings, CD accounts and individual brokerage accounts are unnecessarily probated every day. Probate is a costly and avoidable court process in which assets are distributed according to court instruction. Many of the accounts listed above can be set up with a transfer-on-death feature to avoid the probate process. Contact your custodian or bank to set this up on your accounts.
Courtesy MSN Money
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