If you haven’t created an estate plan or have one but the documents may be outdated, today’s unprecedented times are a reminder of how vital having an up-to-date plan can be. Here are five of the most important documents for many estate plans:
A will provides instructions for when you die. You
appoint a personal representative (or “executor”) to pay final expenses and taxes and distribute your assets. Remember that beneficiary designations supersede what you have in your will. If you have minor children, a will is the only way to designate a guardian for them.
2. DURABLE POWER OF ATTORNEY
A power of attorney lets you name an agent, or attorney- in-fact, to act on your behalf. You can give this individual broad or limited management powers. Choose them carefully. A traditional power of attorney terminates upon your disability or death. However, a durable power of attorney will continue during incapacity to provide a financial management safety net and terminates upon your death.
3. HEALTH CARE POWER OF ATTORNEY
A durable power of attorney for health care, also called a health care proxy, authorizes someone to make medical decisions for you in the event you are unable to do so yourself. This document and a living will can be invaluable for avoiding family conflicts and possible court intervention if you’re unable to make your own health care decisions. Remember to review this document regularly to ensure the right person is designated to make any necessary medical decisions.
4. LIVING WILL
A living will expresses your intentions regarding the use of life-sustaining measures in the event of a terminal illness. It expresses what you want but does not give anyone the authority to speak for you.
5. REVOCABLE LIVING TRUST
By transferring assets into a revocable trust, you can provide for continued management during your lifetime (when you’re incapacitated, for example), at your death, and even for generations to come. Your revocable living trust lets trust assets avoid probate and reduces the chance that personal information will become part of public records.
• Make sure your loved ones are able to access your documents or know whom to contact (such as your attorney) when they need them.
• Go over account titling, powers of attorney, and successor trustee provisions to be certain the right individuals have access to funds.
• Determine who should have information on electronic passwords and online banking access so they can access information, update automatic payments, etc.