You've heard us say that you need to make an estate plan, but what does an "estate plan" cover and how do you make one? Here's a list of some issues to consider.

You've heard us say that you need to make an estate plan, but what does an "estate plan" cover and how do you make one? Here is a simple list of some important estate planning issues to consider.

1. MAKE A WILL. In a Will, you state who you want to inherit your property and name a guardian to care for your minor children should something happen to you and the other parent.

2. CONSIDER CREATING A TRUST. If you hold your property in a Revocable Living Trust, your survivors won't have to go through probate court, a time-consuming and expensive process.

3. MAKE HEALTH CARE DIRECTIVES. Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a Directive to Physicians (commonly called a "Living Will") and a health care power of attorney, which gives someone you choose the power to make decisions if you can't. (In some states, like Idaho, these documents are combined into one, called an advanced health care directive.)

4. MAKE A DURABLE POWER OF ATTORNEY FOR FINANCIAL MATTERS. With a Durable Power of Attorney, you can give a trusted person authority to handle your finances, debts, and assets if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact (but doesn't have to be an attorney).

5. PROTECT YOUR CHILDREN'S PROPERTY. You should name a Trustee to manage any money and property your minor children may inherit from you. This can be the same person as the guardian you name in your Will.

6. FILE BENEFICIARY DESIGNATION FORMS. Naming a beneficiary for bank accounts and retirement plans makes the account automatically "payable on death" to your beneficiary and allows the funds to skip the probate process. Likewise, in almost all states, you can register your stocks, bonds, or brokerage accounts to transfer to your beneficiary upon your death.

7. CONSIDER BUYING LIFE INSURANCE. If you have a spouse, young children, or own a house, or you if may owe significant debts or estate tax when you die, life insurance may be a good idea.

8. UNDERSTAND ESTATE TAXES. Most estates--more than 99%--won't owe federal estate taxes. For deaths in 2021, the federal government will impose estate tax at your death only if your taxable estate is worth more than $11.7 million. (This exemption amount rises each year to adjust for inflation.) Also, married couples can transfer up to twice the exempt amount tax-free, and all assets left to a spouse (as long as the spouse is a U.S. citizen) or a tax-exempt charity are exempt from the estate tax.

9. COVER FUNERAL EXPENSES. Rather than a funeral prepayment plan, which may be unreliable, you can set up a payable-on-death account at your bank and deposit funds into it to pay for your funeral and related expenses.

10. MAKE FINAL ARRANGEMENTS. Make your end-of-life wishes known regarding organ and body donation and disposition of your body--burial or cremation.

11. PROTECT YOUR BUSINESS. If you're the sole owner of a business, you should have a succession plan. If you own a business with others, you should have a buyout agreement.

12. PROPERLY STORE YOUR DOCUMENTS. Your attorney-in-fact and/or your Personal Representative (the person you name in your Will to administer your property after you die) may need access to the following documents:

* Will

* Trust Agreements

* Insurance policies

* Real estate deeds

* Certificates for stocks, bonds, annuities

* Information on bank accounts, mutual funds, and safe deposit boxes

* Information on retirement plans, 401(k) accounts, or IRAs

* Information on debts: credit cards, mortgages and loans, utilities, and unpaid taxes

* Information on funeral prepayment plans, and any final arrangements instructions you have made.

Keeping your documents organized will be a great help to your survivors.

If you have estate planning questions, please feel free to give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.