8 Documents That Are Essential to Planning Your Estate

Photo by pixelheadphoto digitalskillet / Shutterstock.com

If you want loved ones to remember you fondly, tackle your estate planning tasks. Your heirs will thank you for not leaving a legal mess to sort out.

Many of us want to get going on this planning but don’t know where to start. Here’s what you should know about eight documents that can help you get your affairs in order.

If that sounds like a lot of paperwork, don’t worry: You probably won’t need every document. And if you’re wondering where to find the documents you do need, not to worry: Just head to Money Talks News partner Rocket Lawyer, where you’ll find everything you need, cheap.

Essential Estate Planning Documents

1. Last will and testament

A will gives you the power to decide what is in the best interests of your children and pets after you’re gone. It also can help you determine what will happen to possessions with financial or sentimental value. It typically names an executor — someone who will be in charge of following your directions. Finally, you can include any funeral provisions.

Use your will to name guardians for those under your care, including minor children and pets. Designate any assets you are leaving for their care.

If you’re married, your spouse needs a separate will, AARP says.

In the absence of a last will and testament, a probate court will name an executor — typically a spouse or grown child — for your estate. Probate proceedings are a matter of public record. So keep private information — passwords, for example — out of your will, as that information could become part of a public document.

2. Revocable living trust

A living trust is another tool for passing assets to heirs while avoiding potentially expensive and time-consuming probate court proceedings.

You name a trustee — perhaps a spouse, family member or attorney — to manage your property. Unlike a will, a trust can be used to distribute property now or after your death.

If you have substantial property or wealth, a trust can provide tax savings.

ElderLawAnswers further explains the differences between trusts and wills. Creating a trust is not usually a do-it-yourself project. Consider getting an attorney’s help.

3. Beneficiary designations

When you purchase life insurance or open a retirement plan or bank account, you’re often asked to name a beneficiary, which is the person you want to inherit the proceeds when you die. These designations are powerful, and they take precedence over instructions in a will.

Keep beneficiary designation papers with your estate planning documents. Review and update them as your life changes.

4. Durable power of attorney

A durable power of attorney allows you to choose someone to act on your behalf, financially and legally, in the event that you can’t make decisions.

Don’t put off this chore. You must be legally competent to assign this role to someone. Older people worried about relinquishing control sometimes put off the task until they are no longer legally competent to do it.

5. Health care power of attorney and living will

To ensure that someone can make medical decisions for you in the event you become incapacitated, establish a health care power of attorney — also called a durable health care power of attorney. This is different from the previously mentioned durable power of attorney for financial and legal affairs.

A living will lets you explain in advance of your death what types of care you do and do not want, in case you can’t communicate that in the future. It’s strictly a place to spell out your health care preferences and has no relation to a conventional will or living trust, which deals with property.

“You can use your living will to say as much or as little as you wish about the kind of health care you want to receive,” says legal site Nolo in a detailed article.

6. Digital asset trust

You can use a digital asset trust to decide what to do with your electronic property, including your computer hard drive, digital photos, information stored in the cloud and online accounts such as Facebook, Yahoo, Google and Twitter. Create a separate list of your passwords.

What Happens to Your Email and Social Media After You Die?” explains how to make these decisions.

7. Letter of intent

For instructions, requests and important personal or financial information that don’t belong in your will, write a letter. Use it to convey your wishes for things you hope will be done. For example, you may have detailed instructions about how you want your funeral or memorial service to be performed.

No attorney is needed. The letter won’t carry the legal weight of a will.

8. List of important documents

Make certain your family knows where to find everything you’ve prepared. Make a list of documents, including where each is stored. Include papers for:

  • Life insurance policies
  • Annuities
  • Pension or retirement accounts
  • Bank accounts
  • Divorce records
  • Birth and adoption certificates
  • Real estate deeds
  • Stocks, bonds and mutual funds

Another item helpful for your heirs is a list of bills and accounts, including contact information and account numbers for each, so your representative can settle and close these accounts.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Ways to Save Money Without Trying
7 Ways to Save Money Without Trying

Saving money doesn’t always mean drudgery and sacrifice. These tools make it easy — sometimes even fun.

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

13 Brilliant Bulk-Buy Items on Amazon
13 Brilliant Bulk-Buy Items on Amazon

Every household should have these products on hand. Buying them in bulk on Amazon saves you cash.

How to Achieve Your Financial Goals in 2020
How to Achieve Your Financial Goals in 2020

New year, new you. Get your finances on track with the help of these tools for investing, saving, budgeting and earning.

12 Ways Retirees Can Earn Passive Income
12 Ways Retirees Can Earn Passive Income

These simple ways of earning income without a lot of active, ongoing effort can stretch your retirement dollars.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

These 5 States Are the Most Expensive Places to Retire
These 5 States Are the Most Expensive Places to Retire

If you expect to have modest retirement income, you may want to avoid spending your golden years here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.