Estate planning is already taking one step toward protecting your loved ones in the event that something happens to you. You would want everything to go according to plan to save your family from unnecessary stress and burden. With that said, it is important to have a well-crafted estate plan backed up by necessary documents to ensure it is complete and ready for execution.
Estate planning: document checklist
Estate planning can be complex and understandably, some may need clarification about the documents they should prepare. Here are the documents you should add to your estate plan checklist:
- Will: This document ensures that the administrator will distribute the deceased’s assets according to their wishes. The individual should also consider assigning a guardian for their minor children to avoid them from being placed under the custody of a family member one may not trust or under the state’s custody.
- Power of attorney: This document allows an assigned agent to transact and make legal decisions on the owner’s behalf in case they cannot do so themselves.
- Advance healthcare directive: In this document, the individual outlines their medical care preferences. Moreover, they may designate someone they trust to make important medical decisions for them in the event of incapacity.
- Beneficiary designations: Some assets, such as life insurance policies and pensions, may immediately pass to beneficiaries after the policy owner’s death. This is why it is important to assign beneficiaries while still living.
- Trusts: Some individuals may choose to execute a trust which allows a trustee to manage one’s assets while they are still alive. And in case of death, the trustor’s beneficiaries can immediately receive the assets and save them potential cost and time if they go through a probate proceeding.
This is not a fixed list but rather a list of documents most frequently included in an estate plan.
There is no definitive list of documents one must prepare for estate planning. Each person’s finances, assets and goals are unique. Therefore, documents should be drafted and prepared according to each individual’s goals. It may help to consult with an attorney for the appropriate strategy fit for the individual’s needs.