Essential documents when preparing your estate plan

estate planning

All too many families in America find themselves in a tangled web of legalities when a loved one passes away. A large portion of that legal mess has to do with the deceased’s estate. Choosing to start your estate planning now ensures that your loved ones don’t have to deal with extra stress on top of your passing, but there are a few things you need to know before you get started. 

Essential Documents

When planning what happens to your estate, there are eight essential documents you’ll need. These include:

  • Last will and testament
  • Revocable living trust
  • Durable power of attorney
  • Health care power of attorney and living will
  • Beneficiary designations
  • Provision for digital assets
  • Letter of intent
  • List of important documents

Your last will and testament is simply you deciding where your money, assets, and belongings go after your passing. As you write this, think about what is in the best interest of your children and pets. You also need to pick an executor, which is the person in charge of following the directions in your will. 

Revocable Living Trust and Durable Power of Attorney

This document allows you to pass your assets along without the need for probate court hearings. All you do is name a trustee to manage the property and work with an estate planning and probate attorney to complete the document. 

A living trust can also function if you find yourself unable to make decisions from a condition like dementia or an accident. This is where your durable power of attorney comes into play, allowing you to choose who will make legal and financial decisions on your behalf if need be. 

Health Care Power of Attorney and Living Will

As your power of attorney makes legal and financial decisions, you’ll also need someone to make medical choices on your behalf if you are incapacitated. That’s where this document comes into play, but it also allows you to create a will to advise this person on your healthcare preferences. 

Beneficiary Designations

Bank accounts, life insurance, and retirement plans all require you to name a beneficiary. Whatever decision you made can supersede instructions in your will. So, make sure you change any beneficiaries you need to and keep these documents with your estate planning papers. 

Provisions for Digital Assets

This document details what happens to your hard drive, digital photos, and information stored in the digital realm. That includes social media and other online accounts as well. Make sure to include your passwords so your wishes can be carried out. 

Letter of Intent

This letter includes anything that does not go into a will. It includes instructions, requests, and important information. You might, for instance, want to include how you want your funeral to be performed. If you’re unsure what goes into this letter as opposed to a will, speak with an attorney to create a customized estate plan so your wishes are carried out correctly. 

List of Important Documents

Finally, there are several documents to attach to your estate plan to make the process easier. A list of bills and accounts, complete with contact information, is the first. This allows your loved ones to properly close any accounts in your name. You also need:

  • Life insurance policies
  • Pensions or retirement accounts
  • Annuities
  • Divorce records
  • Bank accounts
  • Real estate deeds
  • Birth and adoption certificates
  • Stocks, bonds, and mutual funds