Unlock Peace of Mind: Your Ultimate Year-End Estate Planning Checklist

What’s the best way to close out the year?

Reviewing your estate plan strategy! 

Ok, so there’s probably a lot more you want to do to end the year with a bang. But one of the most important things you’ll do is make sure your estate plan is in order. As the year comes to a close, it’s the perfect time to look over your estate planning strategy. You want to ensure that everything’s up to date.

While the world outside dazzles with twinkling lights and festive cheer, it’s easy to be swept away in it. But it’s time now to turn your focus inward, and protect your financial wellbeing and your legacy for years to come. In today’s blog, I’m going to give you a comprehensive estate planning checklist. This will help bring you peace of mind going into the new year!

This review will secure your legacy and give you and your family peace of mind for the new year.

Review Your Will and Trusts

Let’s start by revisiting your will and any trusts you’ve put in place. Think of these documents as the foundation for your financial legacy. They specifically outline who gets what, so that your belongings go to the right people (your beneficiaries.) These aren’t documents that you “set and forget.” Wills and trusts are living, breathing documents that you make changes to throughout your lifetime. 

If you don’t update your will regularly, it can lead to a lot of complications. For example, if you have new family members that enter the picture through marriages, birth, or other circumstances — you’ll want to make sure your will reflects that. Without clear instructions in your will, your new family members might be left without a share of your estate.

Let’s consider the Thompsons, a family whose patriarch, Joseph, thought his will crafted ten years ago was good enough. However, with the recent additions to his family and changes to his financial situation — Joseph’s outdated will unfortunately left his family with many uncertainties. Make it a point to update your will and trust so your family will know for certain where you stand, and your wishes.

Assess Beneficiary Designations

Think of your financial outlook like a complex puzzle. You’ve got your key “pieces” like life insurance policies, retirement accounts, and investment portfolios — and they all have a designated beneficiary (someone who will inherit or receive the benefits.) These beneficiaries act as “markers,” guiding each “piece” to the recipient it’s meant to go to. Having this practical system in place helps make the transferring of your assets go as smoothly as possible.  

Assigning a designated beneficiary isn’t a one-time thing; it needs ongoing attention. Every year, your life will bring new changes — new relationships, kids, or unexpected events to name a few. That’s why it’s important to keep your designations up-to-date to align with your current wishes. 

Let’s take John’s story as an example. He forgot to update the beneficiary on his life insurance policy after his divorce. John had taken out a life insurance policy years ago to secure the financial well-being of his family. At the time, his wife was rightfully listed as the primary beneficiary — a decision made with the best intentions.  

When tragedy happened, the money meant for his children’s future went to his ex-wife. Nobody noticed until now. This ended up causing confusion and disputes in the family. The family ended up having to deal with emotional turmoil AND legal complexities.  

John’s mistake, while unintentional, is a lesson for all of us. Reviewing and updating your beneficiaries is not just a formality, it’s a proactive step to ensure your legacy is aligned with your current wishes. You don’t want your family to deal with confusing legal matters while they are simultaneously in emotional pain from your death.

Evaluate Powers of Attorney

Since life always throws uncertainty and challenges our way, having a trusted ally to navigate the twists and turns is invaluable. This ally usually takes the form of a power of attorney — a designated person who is trusted to make crucial decisions on your behalf if you are unable to do so. 

Your power of attorney has legal documents that grant them the authority to act on your behalf in different situations — from financial decisions to healthcare choices. Choosing a trusted person as your power of attorney is crucial for delegating your responsibilities.

Regularly evaluating your power of attorney is very important. It’s the best way to be proactive to ensure that who you’ve chosen is still in alignment with you. When you actively evaluate your powers of attorney, (making sure everything is legally sound) you’re empowering your advocate to act on your behalf with confidence when the time comes. 

Examine Digital Assets

From sentimental memories that you store on Instagram and Facebook, to valuable financial assets that you manage online — your digital footprint is pretty big. That’s why it’s necessary to look over your digital assets to make sure your entire legacy, both physical and digital, is well managed. 
Digital assets cover a broad range of things in our online lives. Digital assets include:

Social Media Accounts

Accounts like Facebook, Instagram, and Twitter hold pictures and memories of your friends and family.

Financial Portfolios

Such as online banking, investment accounts, and cryptocurrency.

Intellectual Property

If you’re a content creator, this could include copyrights, royalties from digital content, or any digital creations with commercial value.

Email and Communication Accounts

Our email holds a ton of personal and professional communications, so it’s important your executors and beneficiaries have access. 

Cloud Storage

Documents, photos, and other digital files stored on the cloud are a part of your digital estate.

Domain Names

If you own websites or blogs, the domain names associated with them are valuable digital assets.

To help your beneficiaries, be sure to create a list of usernames, passwords, and security questions for each digital account. Since digital platforms evolve quickly, it’s vital that you revisit and update your digital estate plan to ensure it aligns with the most current technological and legal outlooks. 

Check Your Life Insurance Coverage

Life insurance helps support your financial security, and gives your loved ones a safety net when they need it. But just like other aspects of your estate plan, your life insurance coverage isn’t just a one-time thing. It requires regular evaluation to guarantee that it’s in line with your current life circumstances, financial goals, and the ever-changing needs of your family.

The great thing about life insurance is that it provides a tax-free lump sum to your beneficiaries when you pass away. This gives your family a financial cushion to help cover any immediate expenses, outstanding debts, and future financial needs. What’s even more great, is life insurance can replace lost income if you’re a significant contributor in your family’s financial stability. That way, your family will be able to maintain their quality of life, even though you’re gone.

Life insurance can also help in settling outstanding financial debts like your mortgage, student loans, and car loans to prevent your family from dealing with the financial burden. But when life changes, so should your coverage. A new birth, marriage, or divorce will most likely make an impact on your financial responsibilities. That’s why regularly reviewing and updating your life insurance policy is super important. Make sure to consult your financial advisor, estate planner, or insurance professionals for some valuable insight on your specific needs.

What Else Do I Need to Review?

Other crucial things that should be part of your year-end checklist are: 

Assessing Your Tax Planning Strategies

Evaluate and optimize your tax planning strategies for the new year to secure your financial health.

Updating Your Healthcare Directives

Protect your well-being by reviewing and updating your healthcare directives so that they reflect your current wishes and preferences.

Reviewing Your Business Succession Plan

Guarantee your business’s future by reviewing and refining your succession plan. This will help ensure a smooth transition in times of change.

Organizing Important Documents

You know those stacks of papers you have all over your house? Make things easier for yourself by organizing them. Everything from wills to financial statements — so things will be streamlined for your beneficiaries.

Communicating With Your Executor

Gain some clarity and understanding by openly communicating with your chosen executor. Make sure they are well-informed and prepared to carry out your wishes effectively.