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Estate Planning Checklist

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There are two basic estate planning checklists. One is for the planning you do while you are alive; the other estate planning checklist is the checklist you use after a family member dies. This article will concentrate on the “life” estate planning checklist.

Four Estate Planning Checklist Issues – Issue 1

Testamentary Will

Every estate planning checklist begins with a will. Yes, the will takes affect when you’re dead, but you do it while you are alive. The will forms the foundation of every estate plan. Even if you have trusts, you need to have a will. The “standard will” or “testamentary will” is the will your grandparents had. It disposed of their estate, and the lawyers loved them.

Actually, the lawyers still love them, because if property passes through a will to heirs, the property has to go through the probate process. The probate process has been stream-lined over the past couple of decades in many states, but the lawyers never got the memo.

Probate can be very expensive. Unfortunately, even though it has been “stream lined,” the lawyers are in a great position to “take advantage” of the family when there is a death in the family. I am sure you would be stunned to learn that many lawyers take the advantage and make a lot of money off probate.

Four Estate Planning Check List Issues – Issue 2

Revocable Living Trust

If you have a living trust on your estate planning checklist, you also have a will, but it will be a “pour over will.” (PS You should have a living trust on your estate planning checklist.)

A pour over will is not the same as the standard testamentary will. It doesn’t have a “distribution” provision. It simply “pours” everything over into the living revocable trust for final distribution out of the living trust.

The estate planning checklist should obviously include a living revocable trust. The trust will actually manage your property while you are alive and then distribute your property after your death.

The major advantage of the living revocable trust is it will avoid probate, but only if you “use it.”

An estate planning checklist needs to include a lifestyle change. You have to get used to the fact that you are no longer an individual or a couple. You are now operating as a trust. Most people never get that down. If you don’t get it, you’re wasting your money on a trust.

It takes quite a bit of education to operate a living revocable trust. The lawyers don’t give that education away as part of the trust’s package price. My father-in-law got a living trust in 1978 and spent over $8,500 (in today’s dollars) on the trust.

When I got out of law school in 1981 and started to look at the trust, I told him his trust wouldn’t do him any good, because the lawyer hadn’t taught him how to use the trust. My father-in-law argued with me, saying that his lawyer had taught him how to use the trust.

But the lawyer’s never teach you how to use the trust. Only about 10% of the people who get a living revocable trust ever figure out how to use them. If the lawyers don’t teach you how to use the living revocable trust, they get the big bucks for writing the trust, and when you die, they get the probate, because the trust fails. It’s a double dip for them.

Four Estate Planning Checklist Issues – Issue 3

Durable Power of Attorney

An estate planning checklist also has to include a durable power of attorney. The first thing a rest home or long term care facility will ask for is a durable power of attorney. It will be critical between the time a family member “goes down” and later dies.

Lots of estate planning checklists just kind of “overlook” the durable power of attorney. You have a better chance of needing your durable power of attorney tomorrow than you do needing your will – a better chance by almost a factor of ten.

The durable power of attorney allows a family member to stand in and take over all of your financial affairs when a family member can’t handle those things for himself or herself. BUT, it allows you to take over without having to go to court and get a court order declaring the family member incompetent. That’s a big deal!

Four Estate Planning Checklist Issues – Issue 4

Living Will

Your estate planning checklist also needs to include a living will. That’s not a testamentary will. It’s the directive to the medical profession. It tells the doctors what to do with you when you are critically ill – plug me in or unplug me.

Living wills are easy to get. Your favorite hospital will have one for you. It’s free. Just get it and use it.

These are the four basic elements that every estate planning checklist should include. There are more issues that need to be addressed, but if you start with these issues, you’re ahead of the pack.

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About the Author

Attorney Lee R. Phillips is a nationally recognized attorney who has helped thousands of audiences understand the latest asset protection, business structuring and tax planning techniques. He is a counselor to the United States Supreme Court and holds licenses in law, real estate and insurance. He has a BS in geology, MS in analytical chemistry, and JD in law. Shortly after starting his career as a patent attorney, he started a cancer research project as the national guinea pig, which included five months in isolation intensive care. Over 150 doctors participated directly in his treatment. He understands his audience, because he lost everything due to his illness. You will understand why asset protection became his passion. For thirty years his company, LegaLees Corporation, has specialized in solving asset protection and tax problems for high net worth individuals. Lee is a motivating, engaging, and dynamic speaker who has spoken to over a million people throughout the United States, Canada and the Pacific Rim helping them understand the law and how to use it to their benefit.

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