Four Essential Estate Planning Documents

What Are The Essential Estate Planning Documents?

Estate planning is the documented approach to organizing your personal and financial affairs to deal with the possibility of incapacity and death. Depending on your current family and financial situation, your estate plan will include three or four documents. Following is a list of four important legal documents and their purpose:

Last Will and Testament

Your Last Will and Testament will contain a detailed list of instructions as to how your property should be distributed after you die. If you have minor children, it will contain certain provisions for designating a guardian for your children and a continuing trust for them until they reach certain ages.

Durable Healthcare Power of Attorney and Living Will

A Durable Healthcare Power of Attorney, sometimes called an Advanced Medical Directive, allows you to designate a healthcare agent, usually a family member, to make medical decisions for you if for any reason you are unable to make them yourself. The Living Will portion allows you to leave a written set of instructions to your physician as to whether or not you want to receive life-sustaining procedures if you have been diagnosed with a terminal condition or are in a persistent vegetative state. It gives guidelines for your family members to follow if you become terminally ill.

Durable General Power of Attorney

A Durable General Power of Attorney, sometimes called a Financial Power of Attorney, allows you to delegate to the person of your choice the ability to manage assets that are titled in your name, including retirement plans.

Revocable Trust

Depending on your personal situation and/or the state where you reside, you may require a revocable trust which contains a detailed set of instructions for what happens if you become mentally incapacitated and what happens after your death. This document would be combined with a type of Will called a “pour-over Will”. It helps avoid the necessity for probate in the event of your death.

In addition to these documents, it is essential that you communicate with your family if you have placed such an estate plan in force and advise them where to locate the originals of these documents in the event of your incapacity or death.