Most people don’t feel comfortable planning for the events in which a loved one passes away. Just thinking about the possibility of your parents, brother, sister, or any other family member dying is painfully breathtaking.
Yet, estate planning – making sure one’s personal affairs are for when the day comes, and we must depart this life, is the best way to ensure our life’s legacy remains in good hands. We spare unnecessary legal work, expenses, and stress to the family that we leave behind.
In the United States, the average adult only thinks about estate planning when they are on their death bed, with a small percentage of people who start preparing their documents at retirement age. However, estate planning can be an even more powerful financial tool when we do it early in life, as an instrument to manage one’s assets while alive, as well as help individuals take advantage of tax savings and estate preservations legal programs.
Related article: What Does it Cost to Create a Living Trust?
We prepared a list of the essential estate planning documents that we consider need to be prepared before end-of-life situations.
- Last will
- Living Trust
- Advance Healthcare Directives
- Powers of Attorney for Financials
- Life Insurance
- Burial Insurance
What is a Will?
A last will and testament, also known as a complete will or legal will specifies how you want your property to be distributed to your beneficiaries upon your death. Your financial accounts, real property, as well as digital assets can be distributed through a Will. Make sure your Will is up to date and valid with the requirements for the sate where you live. Let your Will Executors know where it is; that way, they can find it when the time comes.
What is a Living Trust?
Like a Will, a Living Trust is also used to designate how your estate will be distributed after your death. However, Living Trusts have some additional perks, since it helps avoid the lengthy and expensive probate process, a court-supervised process for distributing your assets.
We believe that a Living Trust is one of the most important financial planning documents that everyone needs as part of estate planning. If you create a revocable living trust, you can make changes to it as often as you’d like, you can establish who your beneficiaries are ( who will inherit your assets), designate a Trustee, the person to carry out your wishes, plan for the care for your children.
Realed article: Wills and Living Trust discount for AARP members and seniors.
Other critical end-of-life documents
Some estate planning documents are more specific about how you want your health and financial decisions to be carried out should you be in a state in which you are incapacitated. Advanced Healthcare Directives and Powers of Attorney for Financial are critical end-of-life documents.
Advance Healthcare Directives?
Advance Health Care Directive is an important legal document for seniors or for individuals who have a critical condition and may find themselves in a situation in which they are not conscious or unable to make clear decisions.
With this document, you can state the way you want to be treated at the end of life. Your state may have particular forms that would need to fill out, stating what kind of treatments you want and under what circumstances and what kind of treatments you don’t want.
Powers of Attorney for Financials
A financial power of attorney (POA) is a legal document that grants a trusted agent the authority to act on behalf of the principal-agent in financial matters. The former is also referred to as the attorney-in-fact while the principal-agent is the person who grants the authority.