An Estate Planning Checklist for Advisors

Posted by Justin C. Duft, JD, CFP, CLU, ChFC, CLTC

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August 5, 2014 at 10:00 AM

Estate planning checklistA plan to distribute wealth, just like a plan to accumulate it, must be tailored around your client's unique situation, goals, and needs. As the trusted advisor, you're well positioned to oversee all elements of your client's plan to help ensure the distribution of assets according to his or her wishes—and at the lowest possible cost.

What follows is a helpful estate planning checklist. Use it to guide your conversations with clients and to help ensure that you've covered all the details in their plans.

An Advisor's Guide to Estate Planning

1) How and when does your client want to distribute his or her wealth to heirs and the community? Be sure that you review the following elements to ensure that your client's plan matches his or her wishes:

check_mark Gifts during your client’s life

check_mark Bequests at death only

check_mark A combination of current gifting and bequests

2) Have the necessary documents been reviewed by your client's attorney? Do all documents that have tax implications meet current goals and tax laws? Carefully discuss your client's goals and how his or her documents should be changed to achieve them. Be sure to review the following:

check_mark Advanced directives (financial and health care powers)

check_mark Will

check_mark Trusts

check_mark Buy-sell agreements or other business succession plans

check_mark Guardian designations

check_mark Fiduciary appointments in these documents

3) Who will manage your client's assets and health care should he or she become disabled? Discuss plans for possible long-term care by reviewing the following documents:

check_mark Durable power of attorney

check_mark Health care proxy, medical directive, and living will

check_mark Revocable trust

4) Has your client provided a safety net for family and friends? Help ensure that your client's wealth will be distributed to loved ones as he or she sees fit. Be sure to carefully examine the following:

check_mark Current and projected cash flow analysis

check_mark Survivor and dependent needs analysis

check_mark Retirement of debt at death

check_mark Current life insurance coverage

check_mark The effects of a gifting program on income

5) Does the ownership of your client's property reflect his or her estate plan? To ensure that the plan matches, discuss the following questions:

check_mark Has your client ever lived in a community property state?

check_mark Has jointly owned property been reviewed?

check_mark Which assets will be available for estate tax planning, if necessary?

check_mark Is a revocable trust funded?

6) Do the beneficiary designations of your client's property and retirement plans reflect his or her estate plan? To ensure that your client's wishes will be carried out, review the following:

check_mark Retirement accounts

check_mark Life insurance and annuities 

check_mark Paid on death, transfer on death, and Totten trust accounts

7) Will your client's estate be distributed at the lowest possible cost? To prevent unnecessary income taxes for heirs, be sure to evaluate the following:

check_mark Federal estate taxes

check_mark State estate and inheritance taxes

check_mark Generation-skipping transfer tax (GSTT) 

8) Will your client's life insurance be received estate tax-free? Help ensure this by considering the following options and actions:

check_mark Transference of ownership to an existing irrevocable life insurance trust

check_mark Addition of term insurance to cover possible estate taxes during the three-year period

check_mark Insurability

check_mark Select a trustee and execute a life insurance trust

check_mark Make premium gifts to the trust

check_mark Have the trustee pay life insurance premiums

9) If your client has a taxable estate, has the client made the best use of his or her federal or state estate tax exemptions? Consider:

check_mark Making an outright gift or bequest outside of a bypass trust

check_mark Including tax planning provisions in his or her revocable trust

check_mark Structuring ownership of assets to maximize the estate tax planning structure in the plan

10) Is your client taking advantage of the annual gift tax exclusion and other tax exceptions? Evaluate the following aspects of his or her estate plan:

check_mark Annual gift tax exclusion

check_mark Qualified transfers for educational and medical expenses

check_mark Lifetime gift tax exclusion

check_mark Valuation discounts for gifts over $1 million

check_mark GSTT election to dynasty trust

check_mark Gifts to charities

11) Does your client have asset protection concerns? Evaluate these concerns by reviewing the following:

check_mark Umbrella liability policy

check_mark Maximizing qualified plans

check_mark Statutory protection of insurance, annuities, and homestead laws

check_mark Business entity

check_mark Tenancy in entirety

check_mark Asset protection trusts

12) Is your client the trustee or beneficiary of an existing trust? If this is the case, be sure to review and consider the following:

check_mark Trustee authority provisions

check_mark Investment policy statement

check_mark Insurance due diligence

13) Does your client have any issues that require special attention? Discuss whether any of the following exists:

check_mark Special needs children

check_mark Children of a prior marriage

check_mark Dependent parents

check_mark Unmarried couple

check_mark Pets

check_mark Potential inheritance

14) Do your client's heirs understand his or her estate plan? To ensure that all parties full grasp the implications of the plan, consider:

check_mark Holding a family meeting to discuss the plan

check_mark Drafting letters of instructions

check_mark Determining a safe location for documents and records

What do you think? Have we left anything off this estate planning checklist? What other tools do you use when discussing legacy plans with clients? Share your thoughts and tips for below.

An Estate Planning Blueprint for Financial Advisors

Topics: Financial Planning, Estate Planning

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