Legal Health Checklist

Use our legal health checklist to see if you have everything you need to be legally & financially protected.

When you begin working we suggest:

  • Obtaining the Employment Agreement and Handbook for knowing the rules.
  • File Taxes to build records and to avoid debts.
  • Maximize Roth IRA and 401(k) Match to maximize tax savings.
  • Use Flexible Savings Accounts for a tax deduction on all expenses that qualify.

When you turn 18 we suggest:

  • A Will to determine how your assets will be distributed.
  • A Financial Power of Attorney appoints someone to make your financial decisions if you become unable.
  • A Living Will & Health Care Directive to make advance decisions regarding your healthcare and last wishes.
  • Life, Disability, Health, Liability Insurance Policies to cover assets, income, and liabilities.
  • Maximize a Health Savings Account for tax-free savings for healthcare and long term care.
  • A Roommate Agreement to handle disputes among non-family members.

When you purchase, sell or exchange a vehicle or other valuable property we suggest:

  • A Bill of Sale to detail the terms of sale for an item.
  • A Purchase Order as evidence of the terms to purchase goods in case a disagreement occurs.
  • Property Insurance to protect the asset.

When you purchase or lease real property we suggest:

  • Purchase Agreements and Deeds as evidence of the terms of purchase and details of the rights to a property in case of disagreements or future transfers.
  • Rental/Lease Agreements to dictate warranties, protections, and responsibilities.
  • Title & Homeowners/Renter’s Insurance to protect against mistakes and accidents

If you get married we suggest:

  • Add spouse’s name to Will and Beneficiary Forms, consider adding to POAs or Trusts.
  • A Marriage Agreement to formalize expectations of a new or existing marriage.
  • Property Assignments to describe what is joint and individually owned property.
  • Joint and Separate Bank Accounts to distinguish between joint and marital property.

If you have children we suggest:

  • Adding Guardianship Designation and names to Wills, Trusts, POAs, and beneficiary forms.
  • A Family Trust funded with savings or life insurance to make sure your family is provided for.
  • A Parenting/Custody Agreement to reduce fighting over the kids.
  • An Education Savings Account and Minor Checking Account to manage a child’s savings.

If you open and run a business we recommend:

  • Articles of Incorporation/Organization to organize as a separate entity for liability purposes.
  • Ownership/Operating Agreements to dictate how the business will be owned and operated.
  • Employment Agreements to formalize the terms and expectations of a working relationship.
  • Purchase Orders or Service Contracts to formalize terms with customers and clients
  • Copyrights, Patents, & Trademarks to protect your intellectual property.
  • Buy-Sell Agreements to ensure business succession and asset transfers are handled properly.

When you retire we recommend:

  • Obtaining for Medicare and Supplement Plans
  • Spending Social Security funds 1st before Traditional IRA funds before Roth IRA funds before HSA funds.
  • Considering Long-Term Care Insurance and saving HSA funds for eldercare.
  • Medicaid Planning in case you need long-term care you cannot afford.
  • Considering a Credit Shelter Trust and/or Life Estate to protect your nest egg from creditors.
  • Tax Plan for estate and gift taxes using QTIP, GST & Charitable Remainder Trusts, Foundations and Disclaimers.

If you get Disabled we recommend:

  • File for SSI and SSDI to obtain government benefits.
  • Get help finding specialized housing options in your area.

If you get Divorced we suggest:

  • A Separation Agreement explaining how the parties will live and conduct affairs.
  • A Property Settlement Agreement describing how property and income will be divided.
  • A Custody Agreement describing how custody, support, and visitation of children will be divided.

When accidents occur we recommend:

  • You gather Evidence, pictures and notes and refuse to make a statement or answer questions without an attorney present. You may need to ask if you are free to leave.
  • A Retainer Agreement or to call an attorney so you have an attorney ready to quickly advise you on the best course ahead.

We recommend having all documents drafted or reviewed by an attorney so that you don’t get caught with the short end of the stick.  Contact Tarris Law to get your matter checked off.

Disclaimer

10 Parts of a Complete Estate Plan

Creating a Complete Estate Plan

Creating a comprehensive estate plan is a long and tedious task. You have to document all your assets and accounts, decide who the beneficiaries are and who will have control, all while looking for tax saving strategies. The list below should clarify many of the legal parts and briefly explain what each document or designation does.

1.) Last Will & Testament

A will is the most basic legal document for estate planning. Without a last will, the court can decide how your assets get distributed and who gets custody of minor children. Wills allow you to specify which possessions go to whom and designate care instructions for minor children, as well as make funeral arrangements in advance. Wills are often accompanied by a living will to cover disabilities, testamentary trusts and life insurance to protect minors and other loved ones, and a living trust to avoid publicity and probate taxes.

2.) Living Will

A living will is the most important legal document to have during your lifetime and in your estate plan. It allows you to describe the type of care you want should you become critically ill, and what you want in end-of-life care. Once completed, you should give a copy to your lawyer, doctor, hospital, power of attorney, and others close to you so it is available when needed instead of tucked in a safe.

3.) Living Trust (Inter Vivos Trust)

Living trusts are used to keep estate distribution a private matter, while also avoiding court, and probate taxes. They can be combined with a Financial Power of Attorney to assign a decision maker upon incapacitation, and with a “pour-over” will, to transfer assets not included in the trust and assign guardianships. They are also revocable should your situation change your estate plan can change with it.

4.) Durable Power of Attorney for Health Care and Finances

Financial Power of Attorney – A legal document that authorizes a person of your choosing to make your legal and financial decisions if you become disabled or incapacitated. You may also specify requirements for the position such as providing statements to a lawyer or accountant or having taxes done independently. Without such a designation, you could be put under guardianship should something happen to you.

Healthcare Power of Attorney – A legal document that authorizes a person of your choosing to make your healthcare decisions if you become disabled or incapacitated. This assignment is usually done in conjunction with a Living Will, which allows you to make specific healthcare decisions in advance. Without such a designation, you could be put under guardianship should something happen to you.

5.) Guardianship Designation

This legal designation allows you to decide who will care for your minor children (or pets) called a “guardian of the person” and who will care for their finances, called a “guardian of the estate.” The designation can also be used to leave specific directions for the care of the person or estate.

6.) Testamentary Trust

A testamentary trust is often used to protect assets for minor children and heirs and is one of the most important aspects of a complete estate plan. This allows you to designate how your heirs will receive their inheritance. Often life insurance is used as a funding mechanism for these trusts.

7.) Insurance & Retirement Accounts

Term life insurance is the mechanism most used by testamentary trusts to ensure a child’s care is properly funded.

Whole life policies are an excellent way to create or add to a legacy fund.

Disability insurance is an under-utilized tool to protect your income and lifestyle should you become disabled before retirement.

Long-term care insurance (LTC) provides funding for nursing and home care costs.

Umbrella policies protect assets from personal liability.

Irrevocable life insurance trusts are vehicles used to shield large policies from taxes.

Retirement Accounts such as a 401(k), 403(b), Traditional and Roth IRAs are used to save and fund retirement and to reduce tax liability.

Health Savings Accounts (HSAs) are used to save and pay for health care and to reduce tax liability.

Education saving accounts (ESAs) such as Coverdell or 529 plans are used to save for higher education expenses and to reduce tax liability.

8.) Partnership Agreements

Cohabitation Agreements specify how assets are to be used during the cohabitation and how they will be divided after.

Parenting Agreements specify the care and custody of a minor child.

Marriage Agreements outline assets, custody, and support expectations prior to, during, and after a marriage.

Family Limited Partnerships are legal entities used to transfer ownership of a family business to heirs outside of probate and/or avoid creditors while allowing for the retained control of management decisions.

LLCs with an Operating Agreement are used to help make decisions and define interests and roles among heirs/owners/siblings, regarding jointly owned property, such as houses or farms. This entity also makes co-owned property less appealing to individual creditors and protects personal property from creditors of the LLC.

9.) Ownership & Beneficiary Designations

As a part of your estate plan, you should always designate beneficiaries to your accounts as this will allow those accounts to pass by probate. Joint ownership of various is also used to avoid probate and taxes. Copies of these designations should be kept in a safe place, with your lawyer, and trusted family and/or friends. This form should also include locations of any valuables and keys, a list of accounts, assets, policies, deeds, debts, and advisors, etc. It is the foundation of your estate plan.

10.) Charitable Giving

Charitable Trusts are used to donate your assets to a cause you care about while avoiding taxes.

Private Foundations are a way to control how your charitable offerings are being used while keeping the funds out of your taxable estate.

Donor-Advised Funds allow your to set up an investment fund for the benefit of a charity. These often have better tax deductions than private foundations.

Conclusion

A comprehensive estate plan should include

  • A last will & testament including guardian and executor designations, funeral instructions, and a testamentary trust with a funding mechanism such as life insurance for after death protection
  • A living will & living trust including powers of attorney plus disability insurance & LTC, and retirement/saving account(s) for in life protection.
  • Partnership Agreements and umbrella/liability policies for your securing your business and personal dealings with others.
  • Charitable Trusts, Private Foundations, or Donor-Advised Funds to aid interests that you care about.

If you have any questions about the foregoing list or would like to set up your own personalized estate plan please contact Tarris Law.