1. Take an inventory of your assets and liabilities
o Make a list of all of your assets. Remember to include any insurance policies, real estate, retirement accounts, and any other investments.
o Make a list of all your liabilities. Your liabilities are paid at your death.
2. Consider discussing your estate plan with your heirs
Having a discussion with your heirs will help clear up your intentions regarding your wishes. It will also help to prevent future conflicts after your death.
3. Be smart with your money, lose less of it in taxes
o You may leave money to your spouse tax free, but you will increase your spouse's estate taxes
o Using the federal estate tax exemption, you may leave a certain amount to your heirs without the money being taxed by the federal government.
o If you choose to reduce your estate before your death by giving gifts, you may give tax free a certain amount a year to individuals. Also, you may pay an institution directly for the education or medical expenses of another.
4. Remember to provide for your minor children
o If both parents of your children die, the court will decide who becomes guardian of your children unless you provide for their guardianship.
o Choose a guardian for your children. Instead of designating both people of a couple, consider designating only one person of the couple in case they separate in the future.
o For checks and balances, choose a financial trustee for your minor children. The trustee should be different from the guardian.
5. Review your plan periodically
o You should review your estate plan after any life change such as death of a spouse, divorce, birth or adoption of a child, change of domicile, marriage, etc.
o You should also review your estate plan every few years even without a life change because your state laws may have changed.