When you hear the term “estate planning,” what comes to mind? You may envision long hours spent in an attorney’s office, huddled over stacks of papers and swimming in legal jargon. But the truth is, estate planning doesn’t have to be difficult or time consuming - and planning your estate is one of the kindest things you can do for the people you love.
So what exactly is estate planning? It’s the process of deciding who will receive your assets and manage your estate when you die. There are many important legal documents you should consider having as part of your estate plan. We’ll go over each one, why it’s important, and how to get it.
1
. Last will and testament
In your will, you specify who you want to inherit certain assets and property after you die. This includes your physical assets — like real estate and personal possessions — and intangible assets, like bank and investment accounts. The recipients of your assets are called your beneficiaries. They can be your family members, friends, or even nonprofits that are important to you.
In your will, you can also name guardians for your minor children and your pets, and choose an executor to carry out the wishes in your will. By making a will, you help ensure that the people and causes you care about are looked after once you’re gone.
2. Revocable living trust
Like a will, a revocable living trust is a legal instrument that lets you distribute your assets after you die. A revocable living trust is a legal entity that “owns” the property you put into it while still allowing you to use and control that property while you’re alive.
A revocable living trust needs more maintenance than a will, but it allows your assets to avoid the time and expense of probate. After you pass away, assets in a revocable living trust can be distributed to your heirs quickly and privately.
To implement a revocable living trust, you must first create, sign, and potentially notarize your trust document. In it, you’ll name a successor trustee, who’s the person responsible for managing the trust after you pass away. Once you sign the document, you should transfer your property to your trust.
3. 
Beneficiary designations
There are certain assets that can skip probate (the court-supervised legal process of distributing your assets) and instead transfer directly to a beneficiary after you die. These types of assets are called non-probate assets and include 401(k) accounts, pensions, and life insurance policies.
For these assets to skip probate, you have to contact each institution where you have a non-probate asset (for example, your bank or life insurance provider) and name a beneficiary for it.
Because non-probate assets skip probate, you shouldn’t list them in your will. In fact, beneficiary designations override what’s written in your will, so it’s important you keep them updated.
4. 
Advance healthcare directive (AHCD) / living will
An advance healthcare directive lets you outline how decisions should be made about your medical care if you’re ever unable to make those decisions yourself. There are typically two parts to an AHCD document — a living will and a medical power of attorney.
With a living will, you outline your medical care preferences in case you’re ever unable to communicate them. These preferences can be about medication, treatment options, surgical procedures, end-of-life care, and more.
With a medical power of attorney, you choose someone — called your healthcare agent — to make healthcare decisions for you if you’re unable to. For example, your agent would step in to make healthcare decisions if you were in a coma or unconscious. AHCDs allow you to plan ahead, stating your medical preferences for a “future you” who can’t.
5. 
Financial power of attorney (POA)
With a financial power of attorney, you can give someone the legal authority to manage your finances and property for you. These tasks could include paying bills, making bank deposits, and managing your real estate property.
If you were to need medical assistance, your financial agent can also use your assets to pay your medical bills and support your family while you’re incapacitated. Your healthcare agent and financial agent can work together to make sure you can afford the medical care chosen for you.
6. 
Insurance policies and financial information
It’s a good idea to keep all your insurance policy documents together, including those for life, health, car, and home. You should also keep a list of all your financial accounts and instructions to access them. This includes bank accounts, credit cards, mortgages, loans, tax returns, pension plans, retirement benefits, and investment portfolios. You could store this information in an Excel spreadsheet or write it in a notebook and keep it with your estate planning documents.
7.
Proof of identity documents
It helps your executor if you have all your identity documents in one easy-to-find place. This includes your Social Security card; birth, marriage, and divorce certificates; prenuptial agreements; divorce settlements; and any Armed Forces discharge papers.
8. 
Titles and property deeds
Make sure you have the proper title and deed documents for all your property. This includes homes, vehicles, and other real estate. If you create a revocable living trust, you have to transfer your property to the trust in order for it to skip probate. This means your deeds and titles should list the trust as the current owner.
Keep in mind that the names on deeds or titles override what’s written in your will. For example, if your spouse is listed as a joint owner on your house deed, and they’re still alive when you pass away, they will legally be the owner of the house, even if you try to give it to someone else in your will.
9. 
Digital account logins and passwords
The average person under 70 years old has more than 160 digital accounts. To help you manage them, consider using a password manager or digital vault. These platforms keep track of your login information for all your online accounts. It’s also becoming more popular to name a digital executor in your will. A digital executor distributes your digital assets and manages or closes digital accounts after you pass away.
10. 
Funeral instructions and wishes
This lets your loved ones know if and how you want to be buried. You can also outline other wishes, including passages you’d like read at your funeral or memorial donations you want made to your favorite charities.
Unlike many items on this list, funeral instructions aren’t legal documents — there’s no legal form you need to fill out or have notarized.
What to do once you have your documents
Once you have your estate planning documents, store them in a safe, accessible place. Consider telling your loved ones where your documents are. And give a copy of the documents to people who may need them. (For example, your healthcare agent should receive a copy of your advance healthcare directive.)
Your life is constantly changing, so your estate plan will need to change over time, too. Revisit your estate plan every three to five years, or whenever you have a big life event, like getting married or buying a house.
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*Any articles in the Libra or posted by Jones Law Firm LLC are not legal advice for a particular client or situation. Further no attorney-client relationship is intended or created with this post.*
