Estate planning isn’t just for the wealthy – it’s essential for every family that wants to protect their loved ones and ensure their wishes are carried out. Having the right legal documents in place provides peace of mind and can save your family significant stress and expense during difficult times.
Certain estate planning documents serve specific purposes and offer unique protections. Here are the seven essential documents every family should have in their estate plan.
- Last Will and Testament
Your will is the cornerstone of your estate plan. A properly executed will allows you to designate how your assets will be distributed after your death, name an executor to handle your estate, and appoint guardians for minor children. Without a will, state intestacy laws will determine how your property is distributed, which may not align with your wishes.
Most states require that wills be signed by the testator in the presence of two competent witnesses. While handwritten wills may be valid in some states if entirely in your handwriting, a properly witnessed will provides greater legal certainty.
- Revocable Living Trust
A revocable living trust can be an excellent complement to your will, particularly for families with significant assets. Assets held in a properly funded trust avoid probate, providing privacy and potentially reducing costs and delays for your beneficiaries.
The trust allows you to maintain control over your assets during your lifetime while providing seamless management if you become incapacitated. Upon your death, the successor trustee can distribute assets according to your instructions without court involvement.
- Financial Power of Attorney
A power of attorney allows you to designate someone to handle your financial affairs if you become unable to do so yourself. This document is crucial because without it, your family may need to pursue a costly and time-consuming guardianship proceeding in court.
Choose someone who is financially responsible and consider whether you want the power to be effective immediately or only upon your incapacity.
- Advance Medical Directive
An advance medical directive (also called a healthcare directive) allows you to specify your preferences for healthcare care and designate a healthcare agent to make medical decisions when you cannot.
Given that each state has specific requirements for advance directives, it’s important that this document complies with your state’s law to ensure healthcare providers will honor your wishes.
- HIPAA Authorization
HIPAA restricts who can access your medical information. A properly drafted HIPAA authorization allows your designated family members to obtain information about your medical condition and treatment, which can be crucial during emergencies. This document works in conjunction with your advance medical directive.
- Beneficiary Designations
Keep beneficiary designations current on retirement accounts, life insurance policies, and other assets. These designations typically supersede instructions in your will, so outdated beneficiaries can create unintended consequences. Review and update these regularly, especially after major life events.
- Letter of Instruction
Though not legally binding, a letter of instruction provides valuable guidance to your loved ones about your wishes regarding funeral arrangements, the location of important documents, passwords for digital accounts, and other personal matters.
Keep Your Plan Current
Estate planning documents should be reviewed every three to five years or after significant life events. Working with an experienced estate planning attorney ensures your documents comply with current state law and work together effectively to achieve your goals.
Ready to protect your family’s future? Contact our estate planning team today to schedule a consultation and ensure your estate plan provides the protection your loved ones deserve.
