Estate planning is a task that people tend to put off, as any discussion of “the end” tends to be off-putting. However, those who pass away without their financial affairs in good order risk leaving their heirs some significant problems along with their legacies.

No matter what your age, here are some things you may want to accomplish this year with regard to estate planning.

Create a will or a Living Trust if you don’t have one. It is startling how many people never get around to this, even to the point of buying a will-in-a-box at a stationery store or setting one up online.

How many Americans lack wills? The budget legal service website RocketLawyer conducts an annual survey on this topic, and its 2014 survey determined that 51% of Americans aged 55-64 and 62% of Americans aged 45-54 don’t have them in place.

A solid will or Living Trust portfolio drafted with the guidance of an estate planning attorney may cost you more than a will-in-a-box. It may prove to be some of the best money you ever spend. A valid will may save your heirs from some expensive headaches linked to probate and ambiguity.

Complement your will with related documents. Depending on your estate planning needs, this could include some kind of trust (or multiple trusts), durable financial and medical powers of attorney, a living will and other items.

You should know that a living will is not the same thing as a durable medical power of attorney. A living will makes your wishes known when it comes to life-prolonging medical treatments. A durable medical power of attorney authorizes another party to make medical decisions for you (including end-of-life decisions) if you become incapacitated or otherwise unable to make these decisions. Estate planning attorneys usually recommend that you have both on hand.

Review your beneficiary designations. Who is the beneficiary of your IRA? How about your 401(k)? How about your annuity or life insurance policy? If your answer is along the lines of “It’s been a while,” then be sure to check the documents and verify who the designated beneficiary is.

You need to make sure that your beneficiary decisions agree with your will. Many people don’t know that beneficiary designations take priority over will bequests when it comes to retirement accounts, life insurance, and other “non-probate” assets. As an example, if you named a child now estranged from you as the beneficiary of your life insurance policy, he or she is in line to receive that death benefit when you die, even if your will requests that it go to someone else.

Time has a way of altering our beneficiary decisions. This is why some estate planners recommend that you review your beneficiaries every two years.

In some states, you can authorize transfer-on-death or payable-on-death designations for certain assets or accounts. This is a tactic against probate: a TOD designation can arrange the transfer of ownership of an account or assets immediately to a designated beneficiary at your death.

If you don’t want the beneficiary designation you have made to control the transfer of a particular non-probate asset, you can change the beneficiary designation or select one of two other options, neither of which may be wise from a tax standpoint.

One, you can remove the beneficiary designation on the account or asset. Then its disposition will be governed by your will, as it will pass to your estate when you die.

Two, you can make your estate the beneficiary of the account or asset. If your estate inherits a tax-deferred retirement account, it will have to be probated, and if you pass away before age 70½, it will have to be emptied within five years. If you name your estate as the beneficiary of your life insurance policy, you open the door to “creditors and predators” – they have the opportunity to lay claim to the death benefit.

Create asset and debt lists. Does this sound like a lot of work? It may not be. You should provide your heirs with an asset and debt “map” they can follow should you pass away, so that they will be aware of the little details of your wealth.

One list should detail your real property and personal property assets. It should list any real estate you own, and its worth; it should also list personal property items in your home, garage, backyard, warehouse, storage unit or small business that have notable monetary worth.

Another list should detail your bank and brokerage accounts, your retirement accounts, and any other forms of investment plus any insurance policies.

A third list should detail your credit card debts, your mortgage and/or HELOC, and any other outstanding consumer loans.

Consider gifting to reduce the size of your taxable estate. The lifetime individual federal gift, estate and generation-skipping tax exclusion amount is now unified and set at $5.34 million for 2014. This means an individual can transfer up to $5.34 million during or after his or her life tax-free (and that amount will rise as the years go by). For a married couple, the unified credit is currently set at $10.68 million.

Think about consolidating your “stray” IRAs and bank accounts. This could make one of your lists a little shorter. Consolidation means fewer account statements, less paperwork for your heirs and fewer administrative fees to bear.

Let your heirs know the causes and charities that mean the most to you. Have you ever seen the phrase, “In lieu of flowers, donations may be made to…” Well, perhaps you would like to suggest donations to this or that charity when you pass. Write down the associations you belong to and the organizations you support. Some non-profits do offer accidental life insurance benefits to heirs of members.

Select a reliable executor. Who have you chosen to administer your estate when the time comes? The choice may seem obvious, but consider a few factors. Is there a stark possibility that your named executor might die before you do? How well does he or she comprehend financial matters or the basic principles of estate law? What if you change your mind about the way you want your assets distributed – can you easily communicate those wishes to that person?

Your executor should have copies of your will, forms of power of attorney, any kind of healthcare proxy or living will, and any trusts you create. In fact, any of your loved ones referenced in these documents should also receive copies of them.

Talk to the professionals. Do-it-yourself estate planning is not recommended, especially if your estate is complex enough to trigger financial, legal, and emotional issues among your heirs upon your passing.

Many people have the idea that they don’t need an estate plan because their net worth is less than the lifetime unified credit. Keep in mind, money isn’t the only reason for an estate plan. You may not be a multimillionaire yet, but if you own a business, have a blended family, have kids with special needs, worry about dementia, or can’t stand the thought of probate delays plus probate fees whittling away at assets you have amassed… well, these are all good reasons to create and maintain an estate planning strategy.

Source: MarketingPRO, Inc.