Estate planning is the process of organizing for the orderly transfer of properties after death. The ideal estate plan reduces taxes, expenses, and delays. Moreover, your assets reach the proposed beneficiaries.
An estate plan is a personalized plan tailored to your circumstances and situation. While professionals should handle some aspects of an estate plan, the person creating the plan can do most of the process.
Many believe estate plans are only for the wealthy or the elderly. But who defines "wealthy" and can tell when their time here is up? If you own property, you need an estate plan. In some cases, the process is straightforward, but in others, it can be complex and requires answering some basic questions:
- Who should receive your personal belongings and real property?
- Who do you want to be your children's guardian?
- Who should distribute your property?
- Will you leave part or all your estate to the charity of your choice?
- Do you want to disinherit anyone?
Estate planning allows your survivors to deal with their grief less stressfully. Below is a comprehensive estate planning checklist for the documents you might require to start the process.
Helpful Documents to Start Planning Your Estate
An estate plan requires several documents, and you can use each document to specify your wishes after death or appoint an agent to represent you. To create a comprehensive estate plan, you'll need the following documents:
- Last Will and Testament
- Living Trust
- Durable Power of Attorney (POA)
- Medical or Healthcare Power of Attorney (HCPA)
- Living will
You may also want to include the following estate planning documents. The purpose of these documents is to help loved ones as well as streamline the estate closing process.
They include:
- Insurance policies details
- Financial and banking information
- Deeds and titles
- Digital logins and passwords
- Funeral instructions
As your family changes, you need to update your documents, so make sure to review them frequently. Below are five documents that can get you started on developing your estate plan.
Last Will and Testaments
A successful estate plan begins with your last will and testament. Your attorney will recommend a trust-based or a will-based estate plan once you start your estate planning journey. Will-based estate plans include:
- Your executor or personal representative settles your affairs and ensures all your wishes are followed.
- Your executor or personal representative's responsibilities and powers
- Your beneficiaries and what each will inherit
- Identifies a guardian for your minor children
Start Your Last Will and Testament Now
Living Trust
Often called a revocable living trust, this legal document allows you to transfer assets to beneficiaries and manage them during your lifetime. Creating a living trust does not require a threshold asset size. But families with large, complex estates and multiple beneficiaries often use it.
In case of death, your trustee transfers your assets to your beneficiaries as you wish. A revocable living trust helps avoid the lengthy probate process. But trusts involve maintenance, and if you fail to transfer important assets into your living trust, a pour-over will is valuable because it acts as a safety net for any assets you did not transfer before death.
Durable Power of Attorney (POA)
Durable powers of attorney grant someone the authority to act in a selection of legal and business matters and remain effective even when you are incapacitated. Sometimes named a durable power of attorney for finances.
POAs can take effect immediately or when you become incapacitated. Agents are also attorneys-in-fact, but they don't have to be lawyers. Transactions handled by an attorney-in-fact include:
- Selling and buying real property
- Bills, investments, and bank accounts management
- Remitting taxes
- Claiming government benefits
You may need a court to declare you incompetent without a general durable power of attorney. Having one in place is a good idea.
Start Your Durable Power of Attorney Now
Healthcare Power of Attorney (HCPA)
Healthcare Power of Attorney (HCPA) allows you to appoint someone else to handle your healthcare decisions. You appoint a person as your agent or healthcare proxy on the HCPA document.
A healthcare power of attorney is helpful if you can't express your wishes on medical care and treatment. The first-named HCPA can be replaced if unavailable and differ by state. So, consult your state's rules and forms when arranging one.
By coordinating with the patient's doctors, a healthcare proxy can avoid unnecessary treatments and make the right decisions for the patient.
Start Your Medical Power of Attorney Now
Living Will
Living wills can be helpful when faced with a life-threatening condition, and you can't communicate your treatment wishes. Resuscitation via electric shock, ventilation, and dialysis are all standard medical procedures a living will addresses. You can allow some of these procedures or none.
You can also specify whether to donate organs and tissues. Most states allow citizens to draft living wills; some call the document a medical advance directive or health care proxy. Depending on your state, you may make a detailed, tailored living will or be required to fill out a standardized form.
Insurance Documents
Unlike estate documents like wills, these documents are "contracts" you make with a company, and they are obligated to pay benefits to the named individuals. They include:
- Life insurance policies - Term life insurance and permanent life insurance
- Other insurance plans - Health and dental, homeowners or renters, and auto insurance
- Investments - Pension plans, annuities, bonds, mutual funds, and retirement accounts (IRAs, 401(k)s). Include all compensation plans in your disclosure and details about the transfer of accounts in your legacy plan.
- Deeds or loans to significant assets - Cars, homes, and boats.
- Business details - Buy-sell agreement, transition plans, key roles, etc.
Keep your beneficiary designations up-to-date and align them with your overall estate planning.
Financial Documents and Records
Experts recommend consulting a legal professional if you have a complex estate. A complicated estate plan may include multimillion-dollar estates, second marriages, blended families, and business ventures outside the United States. The documents to organize are:
- Budget and net worth copy - Identify assets, liabilities, income, and expenses.
- Your Social Security number - Includes how to claim benefits, how to collect, and where to claim.
- Account safe deposit box information - Keep records of all checking and savings accounts and the safe deposit keys.
- Credit cards - Latest credit report, including inactive ones.
- Key relationships - Contact information for your financial advisor, insurance agent, estate lawyer, accountant, executor, beneficiaries, and trustee.
- Computer and social media user accounts and passwords - Including social media and email accounts
- For example, memberships for professionals or individuals - Veterans' groups may offer death benefits.
Ready to Plan your Estate?
A stranger could control your assets if you don't have a plan. The legal distribution fees, should you die intestate (meaning without a will) as Aretha Franklin or Prince did, will drastically reduce the value of your estate. Your heirs will not inherit your life's earnings but receive them from attorneys, accountants, appraisers, and others.
These documents should be easily accessible to your executor, spouse, partner, or trusted individual.
Helpful Resources:
Estate planning is the process of organizing for the orderly transfer of properties after death. The ideal estate plan reduces taxes, expenses, and delays. Moreover, your assets reach the proposed beneficiaries.
An estate plan is a personalized plan tailored to your circumstances and situation. While professionals should handle some aspects of an estate plan, the person creating the plan can do most of the process.
Many believe estate plans are only for the wealthy or the elderly. But who defines "wealthy" and can tell when their time here is up? If you own property, you need an estate plan. In some cases, the process is straightforward, but in others, it can be complex and requires answering some basic questions:
- Who should receive your personal belongings and real property?
- Who do you want to be your children's guardian?
- Who should distribute your property?
- Will you leave part or all your estate to the charity of your choice?
- Do you want to disinherit anyone?
Estate planning allows your survivors to deal with their grief less stressfully. Below is a comprehensive estate planning checklist for the documents you might require to start the process.
Helpful Documents to Start Planning Your Estate
An estate plan requires several documents, and you can use each document to specify your wishes after death or appoint an agent to represent you. To create a comprehensive estate plan, you'll need the following documents:
- Last Will and Testament
- Living Trust
- Durable Power of Attorney (POA)
- Medical or Healthcare Power of Attorney (HCPA)
- Living will
You may also want to include the following estate planning documents. The purpose of these documents is to help loved ones as well as streamline the estate closing process.
They include:
- Insurance policies details
- Financial and banking information
- Deeds and titles
- Digital logins and passwords
- Funeral instructions
As your family changes, you need to update your documents, so make sure to review them frequently. Below are five documents that can get you started on developing your estate plan.
Last Will and Testaments
A successful estate plan begins with your last will and testament. Your attorney will recommend a trust-based or a will-based estate plan once you start your estate planning journey. Will-based estate plans include:
- Your executor or personal representative settles your affairs and ensures all your wishes are followed.
- Your executor or personal representative's responsibilities and powers
- Your beneficiaries and what each will inherit
- Identifies a guardian for your minor children
Start Your Last Will and Testament Now
Living Trust
Often called a revocable living trust, this legal document allows you to transfer assets to beneficiaries and manage them during your lifetime. Creating a living trust does not require a threshold asset size. But families with large, complex estates and multiple beneficiaries often use it.
In case of death, your trustee transfers your assets to your beneficiaries as you wish. A revocable living trust helps avoid the lengthy probate process. But trusts involve maintenance, and if you fail to transfer important assets into your living trust, a pour-over will is valuable because it acts as a safety net for any assets you did not transfer before death.
Durable Power of Attorney (POA)
Durable powers of attorney grant someone the authority to act in a selection of legal and business matters and remain effective even when you are incapacitated. Sometimes named a durable power of attorney for finances.
POAs can take effect immediately or when you become incapacitated. Agents are also attorneys-in-fact, but they don't have to be lawyers. Transactions handled by an attorney-in-fact include:
- Selling and buying real property
- Bills, investments, and bank accounts management
- Remitting taxes
- Claiming government benefits
You may need a court to declare you incompetent without a general durable power of attorney. Having one in place is a good idea.
Start Your Durable Power of Attorney Now
Healthcare Power of Attorney (HCPA)
Healthcare Power of Attorney (HCPA) allows you to appoint someone else to handle your healthcare decisions. You appoint a person as your agent or healthcare proxy on the HCPA document.
A healthcare power of attorney is helpful if you can't express your wishes on medical care and treatment. The first-named HCPA can be replaced if unavailable and differ by state. So, consult your state's rules and forms when arranging one.
By coordinating with the patient's doctors, a healthcare proxy can avoid unnecessary treatments and make the right decisions for the patient.
Start Your Medical Power of Attorney Now
Living Will
Living wills can be helpful when faced with a life-threatening condition, and you can't communicate your treatment wishes. Resuscitation via electric shock, ventilation, and dialysis are all standard medical procedures a living will addresses. You can allow some of these procedures or none.
You can also specify whether to donate organs and tissues. Most states allow citizens to draft living wills; some call the document a medical advance directive or health care proxy. Depending on your state, you may make a detailed, tailored living will or be required to fill out a standardized form.
Insurance Documents
Unlike estate documents like wills, these documents are "contracts" you make with a company, and they are obligated to pay benefits to the named individuals. They include:
- Life insurance policies - Term life insurance and permanent life insurance
- Other insurance plans - Health and dental, homeowners or renters, and auto insurance
- Investments - Pension plans, annuities, bonds, mutual funds, and retirement accounts (IRAs, 401(k)s). Include all compensation plans in your disclosure and details about the transfer of accounts in your legacy plan.
- Deeds or loans to significant assets - Cars, homes, and boats.
- Business details - Buy-sell agreement, transition plans, key roles, etc.
Keep your beneficiary designations up-to-date and align them with your overall estate planning.
Financial Documents and Records
Experts recommend consulting a legal professional if you have a complex estate. A complicated estate plan may include multimillion-dollar estates, second marriages, blended families, and business ventures outside the United States. The documents to organize are:
- Budget and net worth copy - Identify assets, liabilities, income, and expenses.
- Your Social Security number - Includes how to claim benefits, how to collect, and where to claim.
- Account safe deposit box information - Keep records of all checking and savings accounts and the safe deposit keys.
- Credit cards - Latest credit report, including inactive ones.
- Key relationships - Contact information for your financial advisor, insurance agent, estate lawyer, accountant, executor, beneficiaries, and trustee.
- Computer and social media user accounts and passwords - Including social media and email accounts
- For example, memberships for professionals or individuals - Veterans' groups may offer death benefits.
Ready to Plan your Estate?
A stranger could control your assets if you don't have a plan. The legal distribution fees, should you die intestate (meaning without a will) as Aretha Franklin or Prince did, will drastically reduce the value of your estate. Your heirs will not inherit your life's earnings but receive them from attorneys, accountants, appraisers, and others.
These documents should be easily accessible to your executor, spouse, partner, or trusted individual.
Helpful Resources:
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