Estate Planning Questions to Ask Yourself


Before you sit down with an estate planning professional, take some time to organize your thoughts and consider your needs. The documents that constitute an estate plan may be universal, but the details on those documents need to be tailored to your unique situation. Following are 10 estate planning questions to ask yourself and get the process started.

What are My Preferences for End-of-Life Healthcare?

While the tendency with estate planning is to skip to a will and transferring your assets, it’s important to address what will happen in the time preceding your death. This phase of life often includes time spent in hospitals and care facilities surrounded by doctors who will need to know your preferences. Do you want your medical professionals to take every measure to save, sustain, and prolong your life? If the answer is yes, then it’s probably sufficient to just let your loved ones know this so they are prepared when the time comes. If the answer is no, or if you consent to certain actions but wish to avoid others, you may want to consider drafting a living will, also known as an advance healthcare directive. A living will is a legally-binding document that spells out exactly what is and what isn’t allowed when it comes to your healthcare, so even if you become incapacitated and cannot communicate your decisions, the document will speak for you.

If I Become Incapacitated, Who Will Make Important Decisions on My Behalf?

In addition to possessing a living will, it’s also helpful to nominate someone to speak and act on your behalf if you become incapacitated. The living will can guide your healthcare decisions, but what about your finances? Who will have the ability to access your accounts and pay your bills while you are incapacitated? A durable power of attorney grants someone the authority to legally act on your behalf, whether it’s with healthcare or financial matters. Most people elect their spouse or an adult child to the responsibility, but it can be any individual of your choosing. You can give this person full control and authority over all of your assets, or you can limit their control to certain accounts, possessions, or matters.

Does My Family Know My Funeral and Burial Preferences?

It’s a morbid and emotional subject, but your family should know of your funeral and burial plans. If you have already purchased a grave plot or other services, make sure your loved ones know the full extent of what you payed for. If you have specific plans and requests, make them known. These matters can be addressed in your will, but it’s helpful to include them in a separate letter of intent. Oftentimes a will isn’t opened until days or weeks after the funeral, at which point your funeral instructions would be irrelevant. Leaving a letter of intent with a loved one will ensure they know your plans and preferences before the services.

Who Would I Need to Provide for if I Passed Away Tomorrow?

Now that your end-of-life preparations are covered, it’s time to transition to what needs to happen after you pass away. If you have a surviving spouse, how will their needs be met through the end of their life? How much would they need to maintain your standard of living for years to come? These are questions that a qualified financial advisor can help with, especially one with experience in retirement income planning.

Do you have any minor or dependent children? If both you and your spouse pass away at the same time, you’ll need to choose a guardian to care for your minor children. Without this designation, the court will place minor children with next-of-kin, which may not necessarily be in their best interest. Speak with your intended guardian(s) so they have the opportunity to understand and accept the nomination. Also, instead of directly transferring assets to your minor children or to the selected guardian(s), consider establishing a trust that can manage and administer the assets on your children’s behalf until they reach adulthood.

What are My Assets?

Before you begin divvying up your estate, it helps to understand exactly what that estate entails. Financial accounts are easy to gather, but real estate and personal possessions can get tricky as they may require a professional appraisal to value. It’s probably unnecessary to get these assets professionally appraised at this point (as that will be mandatory when your estate passes through probate), but it will help your estate planning attorney to understand the approximate value of your estate. If you have personal possessions that lack intrinsic value but are rich in sentimental value, note these so that they can be transferred to heirs that will appreciate them.

What are My Liabilities?

While you’re assembling your assets, make a list of your outstanding liabilities, too. This includes major liabilities such as a mortgage, vehicle loans, and student debt, but also smaller liabilities like credit card debt, bills, and personal loans. During the probate process when your assets are formally transferred to your beneficiaries, all of your liabilities will need to be fulfilled before your assets can be distributed. Don’t plan on distributing $250,000 in assets if you have $300,000 in liabilities. In such a case, your estate would be considered insolvent, and what you could transfer to your beneficiaries will be extremely limited.

Who Do I Want to Manage and Settle My Estate?

Since closing an estate and navigating the probate process can be complicated, you’ll want to leave your estate in the hands of a competent family member, friend, or trusted advisor. The individual you nominate to this position will be called the executor, or personal representative. Similar to a power of attorney, the court will provide the executor with Letters Testamentary which will allow them to manage and sell your assets, settle your liabilities, pay for your final bills and taxes, and ultimately distribute the residual estate to your beneficiaries. Depending on your situation, you may also want to nominate a backup executor, in case your primary executor passes away, or if their work is contested by an interested party in probate court. If you do not nominate an executor, the court will appoint a neutral third-party to serve as your estate’s administrator.

Who Will Receive My Residual Estate?

Your residual estate is the value of your estate after all liabilities have been settled. This is the portion that can ultimately be distributed to your beneficiaries. Before meeting with your estate attorney, make a list of all of the people and organizations to whom you would like to gift assets. Your spouse and children will probably be at the top of that list, but it can also include friends, business partners, and charities, to name a few. Collect some basic information for your beneficiaries such as their phone number and address, as this will help when it comes time to notify them of their inclusion in your will. It’s also wise to jot down a list of secondary beneficiaries, in case any of your primary beneficiaries pass away before you.

Am I at Risk for Estate Taxes?

As of 2016, individual estates valued over $5.49 million and joint estates valued over $11 million are subject to estate taxes. Also known as the death tax or the inheritance tax, your estate could face a tax as high as 40%. If you anticipate that your estate will qualify for estate taxes, you’ll need to consult with a professional to position your assets ahead of time to avoid or minimize taxes as much as possible. Remember, tax evasion is illegal, but tax avoidance is prudent.

How Much Influence Do I Want Over How Gifted Assets are Used and Distributed?

This question primarily primes you to discuss the need for a trust with your attorney. A will can direct your assets to the right people, but generally speaking it cannot dictate when those assets are transferred or how they are to be used. If you’d like to control either of these—such as waiting to gift an inheritance to your child until they graduate college, or providing such that the beneficiary can only access the investment income rather than the principal value—a trust may be able to help you exercise additional control.

For long-term peace of mind, contact us to set up a consultation today. We look forward to helping with your will and other estate planning needs.

Call our Estate team at (480)467-4325 to discuss your case today.

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