Estate Planning Checklist: Complete Estate Planning Guide

Estate planning is not as complicated as you may think. You may imagine it as a painstaking process with stacks of documents loaded with legal jargon. However, estate planning is not all that time-consuming and difficult. With the assistance of an experienced estate planning lawyer, you will be guided in preparing the necessary legal documents that will cater to your needs.

This article will provide you with a checklist of documents that are usually prepared in estate planning. You will also learn of the advantages of estate planning and other important matters related to your future.

If you live in SC or NC and have any questions about wills, trusts, probate, or other estate planning matters, call Bespoke Estate Law. Our estate planning attorneys will provide a complimentary review of your needs, and explain how we can help.

Importance of Estate Planning

A common misconception is that estate planning is solely about drafting a last will and testament. In actuality, estate planning covers the disposition of your assets, decisions for healthcare, and the designation of agents or guardians if you become incapacitated or upon your death.

A primary objective of estate planning is minimizing estate taxes and other related costs. With trusts, your assets are transferred to your beneficiaries immediately without the intervention of the probate court. This avoids any delay in the disposition of your property, and your heirs or beneficiaries will not be burdened by legal fees.

In your estate planning, you can specify the exact distribution scheme of your estate after your death. You can name your heirs, percentages received, and when and how they are received. By planning ahead, you can be assured that the disposition of your properties upon your death will be carried out according to your wishes, rather than the default laws of your state of residence.

Your Estate Planning Checklist

Write a Will

The last will and testament is the most common form of estate planning. In this legal document, you outline the totality of your estate and specify how the assets are distributed upon your death. You also name an executor who shall carry out the terms of your will and manage your estate before it is transferred to the heirs.

If you have minor children, you may designate a guardian in your will. The named guardian shall take care of your minor children after your passing until your children reach the age of majority.

With a will, you can be assured that your estate will not be subjected to intestate proceedings, wherein the probate court shall determine the disposition of your estate following the state’s intestacy laws. Intestate succession is a time-consuming and costly proceeding. By executing a will, you can be assured that your properties are distributed according to your wishes.

Form a Trust, if Applicable

A trust is an arrangement whereby a person holds property for the benefit of one or more beneficiaries. It is a written declaration by the owner of the property, the trustor, transferring property to another person, called the trustee, during the trustor’s lifetime or by will or other disposition taking effect upon the trustor’s death (S.C. Code Section 62-7-401(2)).

There are various forms of trusts. They can be revocable, irrevocable, testamentary, or a special needs trust. To determine the ideal trust for your situation, you may consult an estate planning lawyer in South Carolina to help you decide on the right kind of trust for you.

A trust can be advantageous if you have minor children. Upon your death, the trust assets are entrusted to a trustee, who shall hold them until the beneficiaries reach a certain specified age, or reach certain milestones.

A primary factor behind the formation of trusts is their ability to bypass probate for a trustor’s estate. With a trust, the trustor’s estate assets can be directly distributed to the beneficiaries without the probate court's approval.

Set Up a Durable Power of Attorney

A durable power of attorney allows you to designate an agent to handle your financial and legal matters. Some of the common powers assigned to an agent include the management of properties, representation in court, filing taxes, receipt of insurance benefits, and other matters.

A durable power of attorney remains in effect even if you are physically or mentally incapacitated. This is the “durability” aspect of the power of attorney. Without a durable power of attorney, the court will assign a guardian over your person or property in case you are incapacitated. This process can be lengthy and costly.

Medical Power of Attorney (Health care Power of Attorney)

A medical power of attorney allows you to assign an agent who shall make medical or healthcare decisions for you if you cannot. This legal document shall take effect as soon as your physician deems you incapacitated.

Some of the common powers assigned to the agent include consent or refusal to medical treatment, the decision to place you in a medical facility, choosing a healthcare provider, or decisions about life-sustaining treatments.

The agent of a medical power of attorney should be someone who can be trusted wholeheartedly. The agent may be a family member, a close friend, or a relative.

Living Will (Advance Health Care Directive)

Also called an advance health care directive or directive to physicians in some states, a living will outlines your medical preferences regarding life-prolonging treatments, such as feeding tubes and artificial hydration. The living will may also include preferences in pain management medications or treatments and organ donation upon your passing.

In many states, the living will and the medical power of attorney are integrated into one document, assuring that all your healthcare matters are taken care of. In SC, a living will is generally its own document.

HIPAA Release Form

The Health Insurance Portability and Accountability Act (HIPAA) protects the privacy of your health records. With a HIPAA release form, anyone acting on your behalf may access your medical records. Without the said release form, it may take time for your agent to retrieve your medical records.

Normally, the HIPAA release form is included in the medical power of attorney and living will. With these three important documents in place, you will have a complete set of important medical forms that may save your life in the future.

Insurance Policies and Financial Information

Some assets allow you to designate beneficiaries, avoiding probate proceedings in the process. These are called non-probate assets, which include pensions, life insurance policies, 401 (k) accounts, and payable-on-death accounts.

If you have these assets, make sure to update or manage the beneficiaries to reflect your wishes regularly. Failure to update them may lead to unintended outcomes, such as an ex-spouse receiving the proceeds of your life insurance policy.

Other Considerations

The foregoing legal documents are the fundamental instruments in estate planning. To have a more holistic approach to estate planning, you may consider some other factors that can affect the disposition of your estate.

If your estate exceeds the threshold amount, your heirs may be subjected to estate taxes. As of 2024, the current threshold is $13.61 million. Suppose the total value of your estate exceeds the threshold amount, your heirs or the estate need to pay the estate tax before your estate is transferred to your beneficiaries.

To avoid the payment of estate tax, you may dispose of some of your assets during your lifetime. You may give gifts or donations to charities or bequeath properties to your family members or relatives. You may also include “disclaimer” provisions in your will or trust document, or utilize AB trusts to maximize your estate tax exemption amount.

Note that selling a property at a price below its assessed value constitutes a gift subject to gift tax. Generally, the person giving the gift shoulders the gift tax, but other arrangements are possible.

Today, it is wise to include digital assets in your estate plan. These assets may include email accounts, social media accounts, online banking accounts, cryptocurrencies, cloud storage, and similar properties.

To manage your digital assets, you may assign an executor to handle your accounts at the time of your passing. You may provide access and instructions to your executor on handling your accounts after your death. Also, some social media accounts like Facebook have legacy settings where you can assign another person to manage your account after your death.

Finally, consider protecting your assets from creditors, ensuring that your heirs or beneficiaries are financially secure. This can be done by setting up a trust during your lifetime. A trust is a private document not accessible to the public. When you place your properties in a trust, your estate will not be subjected to probate proceedings.

By their very nature, probate proceedings are public record. Creditors may also intervene in these proceedings and file a claim against the estate.

Setting up a trust ensures the confidentiality of your assets. Upon your death, your estate is directly distributed to your beneficiaries without going through probate proceedings.

Consider Hiring an Estate Planning Lawyer in South Carolina

Estate planning guarantees that your wishes are protected and your family is taken care of after your passing. After executing the foregoing legal documents, you must regularly review and update them to ensure that they reflect your wishes and avoid unintended consequences.

Most of the legal forms mentioned in this article are available online. You can fill out these forms and have them notarized before a notary public in your area. However, creating estate planning on your own can be risky. A simple error or omission can botch your entire distribution scheme, or render certain provisions unenforceable. When dealing with the entirety of your life’s work, it is wise to seek professional help to ensure the accuracy of the legal documents you execute.

A dedicated attorney at Bespoke Estate Law will guide you to meeting your estate planning goals. While this article provides essential information in estate planning, additional details may affect the terms in your legal documents. Whether you need help in SC or an estate planning law firm in Wilmington, NC, we are here to help you create a holistic estate plan and make your crucial decisions.