It’s difficult to think about your death, which is one reason many people put off estate planning. Combine that with what could be a mountain of legal paperwork, it’s easy to avoid putting your affairs in order. Estate planning is vital to your family. You don’t want to leave a legal mess for your heirs. Estate planning also helps your family while you’re living. Here are seven documents to consider making part of your estate plan.
A will outlines your wishes after your death. Without a will, the probate court determines who inherits your possessions, who takes care of your children, and who oversees the decisions. Without a will, your case will move through probate much slower.
Revocable Living Trust
A living trust can help you avoid time-consuming probate court while passing your assets to your heirs. Your living trust can distribute property after your death or even before. You may even get some tax savings with your trust.
If you have retirement plans, bank accounts, or life insurance, you are able to designate a beneficiary. Keeping these documents together with your estate plan lets those beneficiaries access those proceeds quickly when you die. You may also want to update your beneficiaries with life changes, such as marriage or divorce.
Durable Power of Attorney
A power of attorney gives another person the authority to act on your behalf, both legally or financially, in the event you are incapacitated. You must be legally competent to create this document, so don’t put it off. A POA expires at your death.
Living Will and Medical Power of Attorney
A living will outlines your wishes per your health before your death. You can also name a person to make medical decisions for you if you become incapacitated or unable to communicate. This can help your family make the right choices if you are terminal or have dementia.
Digital Asset Trust
Electronic accounts and property are a bigger problem for your beneficiaries than they used to be. This document tells your family what to do with your computer hard drive, photos, and social media accounts.
List of Documents/Letter of Intent
Let your beneficiaries know where your estate plan is and what is included. You may also want to include your intentions about your funeral or memorial service. Any documents that help them manage your affairs after your death will be helpful in their grief.