ESTATE PLANNING

CHECKLIST

Ronald C. Morton, J.D., LL. M., CELA

INTRODUCTION
While it may be uncomfortable to think about, it's almost never too early to
begin an estate plan.
You don't have to be wealthy or "old" to see the critical importance of having an estate plan. If you own
anything money, property, retirement accounts, or other assets you need to decide what will happen to
it all after you die.
Here's why
Risks of not having an estate plan:
Loved ones may not be able to afford your funeral costs
Family members may have nancial difculty after a loss of income
Disputes could tear even the closest families apart
Judges will decide what happens to your belongings
Probate court and/or other litigation can be extremely time-consuming and costly
It's not just about money, either.
A good estate plan also dictates what happens to your kids if you and your spouse were to die
before they turned 18. Where would they live? Who would raise them? How would their inheritance be
managed?
Have a business? What happens to it when you're gone? Who gets control?
When you don't have a plan in place, judges and lawyers will ultimately make the decision for you. This is an
invariably stressful, lengthy and expensive process for any family. Plus, decisions could be made that you
would have never agreed with.
This guide will show you 12 simple, essential steps to creating an estate plan that will make sure you and
your loved ones are protected.

About the Author

Ronald C. Morton, LL.M., CELA, is the founding member of the
Morton Law Firm, PLLC. His statewide practice is focused on estate
planning, asset protection planning, elder law, business planning, and
Medicaid planning. Mr. Morton graduated cum laude from Mississippi
College in 1988 with a double major in public administration and
applied sociology. In 1992 he earned a Juris Doctorate degree, magna
cum laude, from Mississippi College School of Law. He was awarded a
Masters of Law in Taxation with Honors from the University of
Alabama School of Law in 2007, and has earned the designation of
Certied Elder Law Attorney by the National Elder Law Foundation.
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1. Start your will.
What is a will?
At its most basic, a will is document that outlines what will happen to your assets when you die. You can
change it and revoke it at any time while you're alive.
Here are some of the essential things you should designate in a will:
Which people (or organizations) shall receive your property
Who shall become a guardian to any children under the age of 18
Who shall manage the assets that you've left for your children
Who will be the executor of your will to carry out the terms you've identied
Do I need it?
Yes. For most people, a will is a fundamental piece of an estate plan. Creating a will is simple and inexpensive,
and the advantages of having one far outweigh the potentially disastrous risks of not having one.
Particularly if you are young, healthy and don't expect to leave much upon your death, then a will is essential.
However, if you've already acquired valuable assets, or expect to, or you want to spare your loved ones from
the costs and delays of probate, then you may want to consider a more sophisticated type of plan, called trust.

2. Consider a living trust.

What is a living trust?
A living trust is an arrangement you create during your lifetime
that designates the beneciary of your assets and/or the
successor who manages them.

Advantages over a basic will

a) Avoid probate
One of the biggest advantages to having a living trust is that your assets and properties don't go
through probate a lengthy process in which the courts distribute your property to the people who
inherit it.
For most families, probate drags on for months before beneciaries can receive any inheritance.
Probate can be expensive, sometimes costing up to 5% of your assets to pay for lawyers and court fees.
In most cases, a basic will does not help you avoid probate. If you're leaving behind anything beyond
a small amount of property, then court proceedings will probably be needed.

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b) Control what happens to your property
A trust offers greater control over what happens to your assets when you die. Beyond just who inherits the
assets, a trust can dictate exactly how they shall be managed.
c) Outline how and when your kids should be entitled to any assets
A trust also gives you greater control over the assets left to your children, such as when they should receive
those assets or how the assets should be used.
d) Plan for "incapacity"
In the event you that should ever become unable to make decisions for yourself, for whatever reason, your
trust can dictate who will make those decisions for you.
e) Keep your nancial affairs private
Anything that goes through probate becomes public record. Using a trust provides an extra safeguard to
keep your nances private.

3. Plan for health care.

What if you got into an accident that left you badly injured and unable to
make decisions?
How would important medical decisions be made?
Which hospitals or doctors would you receive help from?
Who would be responsible for making these decisions for you?
We all like to think this "wouldn't happen" to us. And if it did, we can only
hope that certain loved ones would step up and make the right decisions
for us.
But that doesn't always happen.
Without health care directives in your estate plan, you may not receive the care you hoped for.
There are three key healthcare documents that should be part of everyones estate plan:
An Advanced Healthcare Directive (living will) that includes your specic health care wishes
A power of attorney for health care, so someone you choose can make decisions for you
A HIPAA Release, giving the people that you chose the power to obtain your private medical records
This ensures your medical care is based on specic directions not guessing games and confusion.

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4. Designate a nancial power of attorney.
Who decides what happens to your nances?
In the event of your death or inability to make nancial decisions, you need to appoint someone who can
make these decisions on your behalf known as an attorney-in-fact.
Without a nancial power of attorney, these decisions could be left to lawyers or judges.
Designating a power of attorney gives you control now over the things you won't be able to control later:
Paying debts and bills
Making bank deposits
Writing checks
Handling insurance
Almost everyone can benet from having a nancial power of attorney. If you have assets and/or a source of
income, then it is strongly recommended.

5. Make your sure children's assets are protected.

Let's say you leave $100,000 in assets to be divided to your 3 children, all under the age of 18.
But who is in charge of making sure they get that money, and how?
Imagine a ve-year-old girl, for example, getting a check for $33,000.
And while it may feel safe to assume your spouse will handle it,
consider the consequences if something happened to both of you.
Who would manage your children's money then? Without a plan in
place a Court would oversee the funds until the child turned 21.
As part of your estate plan, you need to name an adult who can
manage the assets your children inherit from you and give them
the power to do it without unnecessary Court supervision.
This can be same person that you designate as their guardian in your
will, but it doesn't have to be.

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6. Name your nancial beneciaries.
Remember, a will on its own will not stop your assets from going through the costly probate process.
So, for example, if you have retirement accounts, insurance benets and other nancial accounts, all
those funds will go through probate.
It could be months before the courts pay out a dime to your loved ones.
And by then, up to 5% (or more) could be gone paid out to lawyers and court fees.
One simple step solves this problem: ling the appropriate beneciary forms.
By selecting beneciaries for your nancial accounts, the funds in those accounts avoid probate and are
automatically payable upon death.

7. Get life insurance.

Many people underestimate the nancial challenges that loved ones face after their death.
The biggest mistake is assuming that your family is too nancial secure that "everything will be ne."
Too often, it's not.
The costs may be a lot higher than you might think:
Funeral and burial expenses
Outstanding debts
Estate taxes
The expenses add up fast and can be overwhelming for loved ones who are suddenly left with the bill while
they are still grieving!
Having a good life insurance policy is crucial, especially if you have young children. It provides some
extra nancial security, so you and your family can have peace of mind.

8. Consider your exposure to estate taxes.

Estate taxes are serious business.
While the rst $5 Million is usually exempt from the estate tax, for estates that exceed this amount the cost
to heirs can be signicant.
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So, for example, if you left $6 million in property and assets to your loved ones, then your family
would have to fork over approximately $400,000 to the feds.
Now, what if most of that money was tied up in real estate and physical assets? That would mean your loved
ones would have to come up with $400,000, regardless of whether they sell those assets.
This not only creates a huge nancial burden, but also a lot of stress.
The good news is that most estates over 99% are exempt from the tax, under current law.
But to play it safe, you need to do your homework and understand how the estate tax works and how it
could potentially affect you and your family.

9. Cover funeral expenses the right way.

We've already discussed the importance of having life insurance
to cover things like funeral expenses.
Since the average cost of a funeral is now between $9,000 to
$12,000, it's important to consider where these funds will come from.
Instead of getting life insurance, some people decide to use a "funeral prepayment plan."
This is very risky.
Sadly, there have been numerous cases of mismanaged, lost and stolen prepayment funds in the funeral
industry. You just never know what could happen between the time you make the deposit and when you die.
A smarter solution is is setting up an irrevocable funeral trust. Such a trust sets aside money that is
immediately available to pay for funerals, and the funds are exempt from things like creditor claims and even
claims from Medicaid.

10. Decide on your nal arrangements.

Having a solid estate plan isn't just a matter of planning what happens to your money and assets.
Another important consideration is what happens to you.

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This is another uncomfortable topic, but the simple fact is: everybody should have control over
what happens to them when they die.
Do you want to be embalmed, buried, cremated?
Would you want your body or organs to be donated?
Is there a mortuary or other institution you'd prefer to handle the services?
What type of casket would you prefer?
Who would you like to be your pallbearers?
What kind of funeral ceremony do you want, if any?
Where should your remains go after the funeral?
Making plans ahead of time ultimately saves money. But also, it spares your loved ones from having to make
these decisions during an already difcult time.

11. Protect your business.

If you own a business, it's critical that you include it as part of your estate plan.
Otherwise, you're ignoring all the hard work, time and money you've put into it.

Sole Owner Businesses

Let's say youre the sole owner of a business. What would happen to it if you were gone or suddenly unable
to continue operating it tomorrow?
How could checks be cashed?
Who would take over the business?
How would that person legally become the new owner?
What would happen to the bank accounts if no one else had access?
How could the business be legally sold?
With a succession plan, you can designate someone to take over the business immediately and ensure there
is no confusion, no downtime, no loss of revenue and no disputes.

Partnerships
If you own a business with others, those partners will obviously continue to operate the business. But what
happens to your shares? Should they simply be dissolved into your partners' ownerships when you die?
Of course not!
By having a buyout agreement in place, the remaining partners will agree to purchase your remaining shares
in the event of your death, and those funds will become part of your estate.
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CONCLUSION
12. Get your documents organized.
What good is having an estate plan if no one knows where you kept all the pertinent documents?
A key aspect of creating an estate plan is organizing all your documents and placing them in a single, secure
location. This ensures that your les easy to access, so there's never any confusion or delay in distributing
your assets to inheritors.
Here are some of the documents that your executor or attorney-in-fact (the person designated in your
power of attorney) will need:
Will
Trusts
Real estate deeds
Stocks and bonds certicates
Insurance policies
Information on all nancial accounts (checking, savings, retirement, investments, etc.)
Debts (credit cards, mortgages, loans, utilities, etc.)
Instructions for nal arrangements
Ask yourself: do you loved ones and/or executor know where to nd all these documents?

Start your estate plan today.

I hope this checklist has made it clear why it's so important to have an estate plan no matter what your
age or income.
That said, I understand it can be a little overwhelming. To create a sound estate plan, you need to have a
solid understanding of the applicable laws, taxes and guidelines. I will assist you in creating an estate plan
that protects your family and assets, and provides peace of mind.

Professional help is a click away!

This publication has been prepared for the general information of clients
and friends of the rm. It is not intended to provide legal advice with respect
to any specic matter. Under rules applicable to the professional conduct of
attorneys in various jurisdictions, it may be considered advertising material.