When Aretha Franklin died intestate in 2018, she joined a surprisingly long list of famed people who left behind no will, leaving survivors with the hassle-laden task of settling her affairs. While your estate may not be the size of a pop star's, it's still important to have a plan in place in the event of your death.

Estate planning goes beyond drafting a will; it means accounting for all of your assets and ensuring they transfer as easily as possible to the people or entities you wish them to go. Along with implementing your plan, you must make sure others know about it and understand your wishes.

If you've procrastinated on determining who inherits your estate, this article will help you get going in the right direction.

1. Itemize Your Inventory

To start things out, go through the inside and outside of your home and make a list of all items worth $100 or more. Examples include the home itself, television sets, jewelry, collectibles, vehicles, art and antiques, computers/laptops, lawn mower, power tools, and so on.

2. Follow with Non-Physical Items

Next, start adding up your non-tangible assets. These include things you own on paper or other entitlements that are predicated on your death. Items listed here would include brokerage accounts, 401k plans, IRA assets, bank accounts, life insurance policies, and ALL other existing insurance policies such as long-term care, homeowners, auto, disability, health, and so on.

3. Assemble a List of Debts

Here you'll make a separate list for open credit cards and other obligations. This should include everything such as auto loans, existing mortgages, home equity lines of credit, and any other debts you might owe. A good practice is to run a free credit report at least once a year. It will identify any credit cards you may have forgotten you have.

4. Make a Memberships List

If you belong to certain organizations such as the AARP, The American Legion, a veteran's association or a college alumni group, make a list of them. In some cases, several of these organizations have accidental life insurance benefits (at no cost) on their members and your beneficiaries may be eligible. Include any other charitable organizations that you proudly support or make donations to. It's also a good idea to let your beneficiaries know which charitable organizations or causes that are close to your heart and that you proudly support or make donations to.

5. Make Copies of Your List

When your lists are completed, you should date and sign them and make at least three copies. The original should be given to your estate administrator (more on him or her later). The second copy should be given to your spouse (if you're married) and placed in a safe deposit box. Keep the last copy for yourself in a safe place.


Estate Planning: 16 Things To Do Before You Die

6. Review All Your Retirement Accounts

Accounts and policies in which you designate beneficiaries pass directly to that person or entity listed at your death. It doesn't matter how you direct these accounts/policies in your will or trust: These beneficiary designations will take precedence. Contact the customer service team or plan administrator for a current listing of your beneficiary selection for each account. Review each of these accounts to make sure the beneficiaries are current and listed exactly as you like.

7. Update Your Insurance

Life insurance and annuities will pass by contract as well, so it's just as important that you contact all life insurance companies where you maintain policies to ensure that your beneficiaries are up-to-date and listed correctly.

8. Assign TOD Designations

Probate is a process in which assets are distributed per court instruction, which can be costly and time-consuming. Assets bequeathed in a will go through probate, as do assets if someone dies intestate, However, many accounts such as bank savings, CD accounts, and individual brokerage accounts are unnecessarily probated every day. Instead, they can be set up or amended with a transfer on death feature (abbreviated to TOD on the account name) to avoid the probate process. Contact your custodian or bank to set this up on your accounts.

9. Draft a Will

Everyone over the age of 18 should have a will. It is the rulebook for distribution of your assets and it could prevent havoc among your heirs. Wills are fairly inexpensive estate planning documents to draft. Most attorneys can help you with this for less than $1,000. If that's too rich for your blood, there are several good will-making software packages available online for home computer use.

Make sure that you always sign and date your will, have two witnesses sign it, and have it notarized. Keep the original in a safe place, and make sure other people know where it is.

10. Choose Your Estate Administrator

Your estate administrator or executor will be in charge of administering your will in the event of your death. It is important that you select an individual who is responsible and in a good mental state to make decisions. Don't immediately assume that your spouse is the best choice. Think about all qualified individuals and how emotions related to your death will affect this person's decision-making ability.

11. Send Copies to Your Administrator

Once your will is finalized, signed, witnessed, and notarized, you'll want to make sure that your estate administrator gets a copy. Unless you are hanging onto the original yourself, you should also keep a copy in a safe place at home.

Bear in mind that, while you can make copies, only the original will—the "wet signature" document, in estate-planning lingo—can be filed for probate.

12. Regularly Review Your Documents

Review your will for updates at least once every two years and after any major life-changing events (marriage, divorce, the birth of a child, and so on). Life is constantly changing and your inventory is likely to change from year to year too.

13. Visit an Estate Attorney

While you may think that you've covered all avenues, it's always a good idea to have a full investment and insurance plan done at least once every five years.

As you get older, life throws new curveballs at you, such as figuring out whether you need long-term care insurance and protecting your estate from a large tax bill or lengthy court processes. Tips like having an emergency medical contact card in your purse or wallet are little things many people never think of that an expert can help you learn. Professionals will also be up on changes in legislation and income/estate tax laws, which could impact your bequests. You might need to restructure your holdings.

14. Simplify Your Finances

If you've changed jobs over the years, it's quite likely that you have several different 401(k)-type retirement plans still open with past employers or maybe even several different IRA accounts. While this normally won't create a big problem while you're alive (except lots of additional paperwork and account management), you may want to consider consolidating these accounts into one individual IRA account to take advantage of better investment choices, lower costs, a larger selection of investments, more control and less paperwork/easier management when assets are consolidated.

15. Initiate Important Estate Documents

At a minimum, you should create a will, power of attorney, healthcare surrogate, and living will, and assign guardianship for your kids and pets. If you're married, each spouse should create a separate will, with plans for the surviving spouse. Also, make sure that all the concerned individuals have copies of these documents.

The Bottom Line

Procrastination is the biggest enemy of estate planning. While none of us likes to think about dying, the fact of the matter is that improper or no planning can lead to family disputes, assets going into the wrong hands, long court litigations and huge amounts of dollars paid (possibly unnecessarily) in federal tax.

So, while you're sitting around the house watching your favorite sports team or television show, pull out a tablet or laptop and start making your lists. To quote Benjamin Franklin, “By failing to prepare, you are preparing to fail.”