A Financial Bucket List: 5 Simple Steps to Make Life (and Death) Easier

Procrastination is the biggest enemy of estate planning; without careful preparation, you could leave your family with a significant financial burden. While pondering your passing is never a pleasant activity, it is essential that you prepare for the inevitable as thoroughly as possible. The only way to make sure you have a peaceful and fond farewell is to get on top of your finances now, by completing this short, sweet financial bucket list.

1. Take an Inventory

First, you should look over the inside and outside of your residence and make written note of any items you find that are worth more than $100. Physical items are the easiest to inventory because their visual presence will jog your memory; however, if you haven’t moved in some time and have collected a lot of material goods, this phase may take a few days or weeks. Pay attention to big and small items alike; many beginner estate planners forget to include immense valuables like cars and the actual house.

Once this is done, you can start to inventory your non-physical property, which includes bank accounts, retirement accounts, and insurance policies. Because these only exist on paper — and more recent ones, only online — you might have difficulty remembering how many such assets are under your name. It is best to visit each financial institution you’ve been affiliated with to double-check on the status of any accounts you may have opened. This inventory should be stored with your list of physical assets, and copies should be made available to any important persons, including your executor and your attorney.

2. List Regular Monthly Payments

The convenience of automatic, digital payments means that many people lose track of how much money they have going out every month or so. Just as it is useful for you to know exactly what you own, it is useful for you to know exactly what you owe. Catalogue any kind of debt that you are currently paying, to include credit cards, mortgages, and others, as well as regular subscription payments, such as magazines, alumni memberships, or charitable donations.

3. Create a Will or Trust

The will is historically the standard document used to divide up a person’s assets after he or she has passed. However, the common will has some major flaws. For example, wills can only go into effect after death, and they only govern property that is held strictly in one person’s name; that means items held in joint tenancy will cause concern. Additionally, wills go through probate, which means a court will oversee the legal distribution; as you might guess, this takes quite a bit of time.

Some health conditions like comas can make wills ineffective or complicated to put into effect. Instead, most savvy estate planners are opting to create trusts, which go into effect the moment they are signed. Trusts are assets held by financial institutions and provided to beneficiaries at a certain time, or after a first group of beneficiaries passes. Plus, a living trust is easy to create on your own, while wills may cost upwards of $1,000 and hours spent in a lawyer’s office.

4. Update Your Beneficiaries’ Information

If you were one of the few who created a will or trust as soon as you turned 18, you probably haven’t thought about the document for several years. It is entirely likely that the beneficiaries you selected way back when have moved, changed their names, or dropped out of your life. In the first two cases, your executor or the courts may not be able to find your beneficiaries or legally provide them their dues; in the last case, you may not want those people to inherit anymore.

When you review your documents, you should update and revise beneficiary information as necessary. You may also want to consult with your banking institution to institute a transfer-on-death (TOD) to important individuals so your accounts won’t needlessly be tied up in probate after you’re gone.

5. Choose an Estate Administrator

Your estate administrator, or executor, is the individual you select to be tasked with responsibilities after you pass. A short list of the executor’s duties includes:

• Open the estate.
• Inventory assets.
• Manage the estate.
• Close the estate.
• Calculate estate taxes.
• Distribute assets.

Unfortunately, too many people become sentimental about the position of executor, and lay these responsibilities at the feet of their favorite person instead of the person who is best for the job. Thought it may be painful, you should assess your friends and family members and find the most competent individual when it comes to business — this person should be your estate administrator.