Whether you own a little or a lot, the last thing you want to do to your loved ones is leave a bureaucratic mess after you pass away or become incapacitated. Aside from mourning your passing or a significant deterioration in your health, this will cause your family additional (and unnecessary) stress. Heirs may forfeit life insurance payouts, tax deduction advantages, or miss accounts they did not know existed. This is why it is key to have your estate plan in place before life circumstances get the best of you.
In order to avoid this stress, below is a list of a 12 documents you should have on hand to ensure you have a solid estate plan in place and that your heirs are protected.
A will is a legal document that states your final wishes in the event of death or incapacity. In this document, you name an executor to carry out your final wishes, heirs to receive assets from your estate, and a guardian for any minor children you may have.
A trust is a legal agreement between you (settlor, grantor, or trust maker), the manager of your assets (trustee) and those who benefit from the trust (beneficiaries). Your assets are put into the trust and managed by the trustee on behalf of the beneficiaries, according to the terms you put in the trust document. All living trusts are revocable (can be easily changed) or irrevocable (cannot be easily changed) and are created and go into effect during your lifetime.
These are used to add meaning and context by explaining the reasons why you want your assets distributed or invested in a particular manner. These are particularly useful when the assets are going to be divided unevenly among children or other beneficiaries/heirs.
Because most wills distribute property in terms that are general, it is important to create an inventory of your personal items to ensure nothing is overlooked and to let family members know if some items are stored in another location. You should include collections, any valuable property, as well as stories regarding family heirlooms.
Power of Attorney
A power of attorney is essential if you become incapacitated as a result of an accident or illness, because it allows a named person to make key decisions on your behalf regarding your finances and/or health care.
These critical documents should be in kept in a safe place, and it would be a good idea to have a copy of each one. These include birth certificates, passports, marriage certificates, immigration papers, and other identifying documentation.
Financial Account List
Put together a list of all your financial accounts. These should include any of the following: checking, savings, money markets, certificates of deposit (CDs), investments, annuity, retirement, pension, etc.
Digital Asset List
While software can be useful in keeping track of your digital assets, change of service terms can make this difficult. Instead, keep really important images or messages backed up and saved in a place where your family can access them (and know where to find them);
You should retain all documents related to every real estate property that you own - closing documents, deeds, homeowners’ insurance, tax payment history, etc.
Business Ownership Documents
If you own, owned, or are buying a business, you should keep all associated paperwork in a safe place. Documents should include, but may not be limited to, buy-sell agreements, stock certificates, LLC shares, operating agreements, corporate minutes, etc.
Past Tax Returns
At a minimum, you should keep the last three years of tax returns and supporting documentation; if you want to be really careful, keep the seven most recent years.
This is particularly important and should include information regarding any pre-arrangements you have made for a funeral or cremation, organ donation, pet care, and who should be notified when you pass away.
Reach Out to Legacy Law Centers for Estate Planning Assistance
If you feel overwhelmed or aren’t sure where to start, reach out to us today to schedule a free consultation where we will walk you step by step in the process of getting these documents in place. Don’t wait until the last minute to insure the protection of your assets and more importantly, your family. Visit the “Schedule An Appointment” tab above to view our calendar or call us at 571-777-1000 for more information!