Estate planning is the process of determining who will receive your assets and manage your estate after you’ve transitioned. It’s more than just making a will, although that is certainly an intricate part of it. Estate planning is about putting all your affairs in order to make the transition of your assets as smooth and stress-free as possible for your loved ones. We’ve included articles covering various segments of Estate Planning: The Importance of Having a Will, Why You Might Need a Trust, Including Digital Assets into an Estate Plan among others to inform you of the importance of Estate Planning and outlining important end-of-life care instructions. Estate plans can also help reduce estate taxes and, in some instances, avoid probate court.
Estate planning can be complicated and intimidating but having an Estate plan is an essential asset for any adult, regardless of health or age. It helps to remember that Estate planning isn’t for you – it’s for your loved ones! Getting your affairs in order is an act of kindness for the important people in your life, it saves them time, money, and confusion during a potentially emotionally trying time. Today, we’ll be covering many important legal documents you should organize to create a solid Estate plan:
- Last Will and Testament: In a legal will, you specify who you want to inherit your assets and property once you die. These recipients are called beneficiaries, and they could include your family, friends, or even nonprofits that are important to you. In your will, you can also name guardians for your minor children and pets. Creating a will ensures the people and causes you care about are looked after once you’re gone.
- Living Trust: Like a will, a living trust is a legal document that lets you distribute your assets after you die. Living trusts need more maintenance than a will, but they allow your assets to avoid the time, expense, and public nature of probate. After your death, assets in a living trust can be distributed to your heirs immediately and privately.
- Beneficiary Designations Beneficiary designations are found on many types of life insurance or retirement accounts like 401(k)s, 403(b)s, IRAs and more. These designations are filed with whichever financial institution is holding your account, and they dictate who will receive the benefits in the account when you pass away.
- Health Care Directive. A health care directive functions similarly to a power of attorney. The difference is that while a power of attorney traditionally handles your financial decisions, a health care directive handles your medical decisions.
- There are two main documents in this category.
- A living will is a written statement that provides instructions for your health care should you become incapacitated. For example, if your personal or religious beliefs are such that you can’t or don’t want to receive a certain type of care, your living will can dictate that to medical personnels.
- The second document is known as medical power of attorney or health care proxy. The designated individual is authorized to make medical decisions on your behalf if you become incapacitated. If your family members are unaware of your true wishes or disagree about your care, it’s good to have these documents in place to ensure your wishes are enforced.
- There are two main documents in this category.
- Financial Information: To make managing your finances as painless as possible, keep a running list of all your financial accounts, and instructions on how to access them. This includes bank accounts, credit cards, mortgages, loans, tax returns, pension plans, retirement benefits, and investment portfolios.
- Letter of Intent: For instructions, requests and important personal or financial information that don’t belong in your will, write a letter. Use it to convey your wishes for things you hope will be done. For example, you may have detailed instructions about how you want your funeral or memorial service to be performed.
- List of Important Documents. Make certain your family knows where to find everything you’ve prepared. Make a list of documents, including where each is stored. Include papers for:
- Life insurance policies
- Pension or retirement accounts
- Bank accounts
- Divorce records
- Birth and adoption certificates
- Real estate deeds
- Stocks, bonds, and mutual funds
Once you’ve collected these documents, store them in a safe, accessible place, like a home safe or a safe deposit box. Make sure you tell your loved ones or the executor of your will where your documents are, so they know where to find them when the time comes. The Estate planning team at The Law Offices of Marjory Cajoux are ready to assist you with the preparation of all the estate planning documents you will need for your specific situation and wishes.