Run your home like a business: Your estate planning checklist

No matter your age or financial status, having a comprehensive estate plan is a must.

An estate plan allows you to express what you want to happen should you become incapacitated, as well as make sure your possessions end up in the right hands after your death. With a solid estate plan, you can make your wishes clear and handpick the people you want to be responsible for both handling your estate and making decisions on your behalf.

Below is a short estate planning checklist. You may not need all of the documents discussed, but by considering the items on this list, you can get the process moving.

1. Last will and testament

The core of any estate plan is the last will and testament, which details where the testator (the person writing the will) would like his property to go after his death. In a will, the testator names an executor to carry out the distribution of the estate. The executor should be someone you trust and who is willing to accept the responsibility.

If you die without a will, you will die "intestate", and state law will determine the fate of your assets. Accordingly, you should make a list of all of your real and personal property, as well as specify the beneficiaries you want to receive your assets.

You can also name a guardian for minor children in a will.

2. Living will

A living will provides instructions to be followed for medical care if you become incapable of expressing your wishes yourself. Common issues addressed in living wills include the use of feeding and breathing tubes, and other end-of-life care decisions.

You may also wish to have a Do Not Resuscitate (DNR) order, which is separate from a living will, placed in your medical chart. A DNR must be signed by your physician following a consultation with you or your representative.

3. Powers of attorney

A power of attorney or POA is a document that gives someone the authority to make decisions on your behalf. You may choose to have different people act on your behalf for financial matters and for health care, or you can name one person to handle everything.

In any event, since a "durable" power of attorney takes effect automatically if you become incapacitated and requires no court involvement, having a durable power of attorney is advised.

Note that some jurisdictions use the comprehensive term, "advance directive," to refer to the health care proxy/power of attorney plus the living will.

4. Life insurance and bank/retirement accounts

You should strongly consider having a life insurance policy, especially if you have minor children, own a home, or anticipate your estate's being responsible for a large amount of debt and/or estate taxes.

Life insurance proceeds are usually distributed outside of the probate process, which means a faster distribution to your beneficiaries.

Similarly, if you name beneficiaries on your bank and retirement accounts, the funds can pass directly to them.

5. Living trust

A living trust allows you to put assets into a trust for your benefit during your lifetime, which are then transferred to designated beneficiaries at your death by the “successor trustee," the person in charge of facilitating the distribution of assets, also chosen by you.

The distribution of living trust assets also occurs outside of the probate process.

6. Estate taxes

Only a small percentage of estates are subject to federal estate tax—estates valued below $5.49 million are exempt as of 2017—but there may also be state death and/or inheritance taxes for you to consider.

In any event, if you think your estate could be facing payments, you should consult an estate planning attorney immediately.

7. Digital assets

From your online banking to your social media accounts, it's important to gather all your logins and passwords in a convenient location so that someone you trust will be able to access your digital assets after you cannot.

You can also leave specific instructions on what you want done with each account. In Facebook settings, for example, you can designate a "legacy contact" to have access to your account after your death.

8. Other end-of-life arrangements

You may choose to provide instructions for your funeral, as well as covering related expenses, in your end-of-life documents. Prepaying for your funeral is one option, or you may consider a payable-on-death bank account for this purpose.

Organ and body donation may be other issues to consider.

9. Safe storage

Once all of your estate planning documents are prepared, put them in a safe place and tell your executor and/or the person you named in your power of attorney where to find them.

10. Updates

You're not done yet! An estate plan is living and breathing just as long as you are, which means you should revisit the documents to make sure everything is still correct and in accordance with your wishes.

Once a year, have a look at them and think about any births, deaths, marriages, divorces, etc., that could affect your estate plan, including named beneficiaries and chosen representatives or guardians of minor children.

After considering these estate planning basics, you'll be ready to move forward with getting your affairs in order. In doing so, you'll not only give yourself peace of mind knowing your wishes will be followed once you're gone, but you'll also be doing your loved ones a huge favor as they will know exactly what you wanted, too.