You Shouldn’t Be Without Each estate plan is as unique as the person making the plan, but there are some common categories of documents that should be found in every estate plan
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Deborah A. Sexton
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Despite the fact that most people realize the need for an estate plan, a shocking 60 percent of Americans do not have one. The reasons people give for why they have yet to sit down and create an estate plan are varied and numerous; however, the reason often boils down to the fact that people don’t understand estate planning and, therefore, simply don’t know where to start. Of course, each estate plan is as unique as the person making the plan, but there are some common categories of documents that should be found in every estate plan. In addition, there are some documents within each category that are frequently found in an estate plan. Each of these documents will make the process of probating your estate less costly and less time consuming and/or will make decisions in the event you become incapacitated much easier.
The Basics Last Will and Testament Your will is the foundation upon which your entire estate plan is built. Your will directs how your assets will be gifted upon your death and/or references other important documents that further direct gifting. Your will also appoints your executor and can nominate a guardian for minor children.
Letter of Instruction
Trusts
This is an informal letter that provides
Today, a large percentage of estate plans
important information to your family or loved
include at least one trust. A trust can also be as
ones regarding your estate. It can include
simple as a pet trust that provides for the
something as simple as how to winterize your
family dog to a complicated charitable split-
house to something as complex as
interest trust that is funded with millions of
instructions regarding where assets are
dollars.
hidden or documents kept.
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Proof of Ownership
Deeds to real property – even if the property will pass without the need to go through probate, make sure the original deed can be located.
Vehicle titles
Cemetery deeds
Stocks, bonds and investment accounts – along with original certificates, create and include a list of accounts, where the account is held, account number and any necessary codes or passwords needed to access the account.
Partnership agreements, corporation documents – if you have an ownership interest in a business be sure to include the operating agreements as well as any buy-sell agreements or other relevant legal documents pertaining to the business.
Healthcare
Family and personal medical history – this can be helpful in the event of your sudden incapacitation.
Living Will – this allows you to determine ahead of time what types of medical treatments you want and which ones you will refuse in the event that you become terminally ill.
Durable Healthcare Power of Attorney – this allows you to appoint someone to make healthcare decisions for you if you become incapacitated.
Authorization to release medical history – federal law prevents access to your healthcare information by anyone but you and those whom you authorize. By completing an authorization ahead of time, you will make it easier for loved ones to handle insurance matters if the need arises. Sexton Law Office | www.Arkansas-EstatePlanning.com
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Life Insurance and Retirement
Life insurance policies
401(k) Accounts
Individual Retirement Accounts
Pension documents
Annuity contracts
Funeral Arrangements
Pre-paid funeral contract – if you have pre-paid for your funeral and burial, keep the contract and proof of payment in this folder.
Funeral trust – creating a funeral trust is a popular method for handling funeral arrangements. Not only can you make clear your wishes, but many people choose to fund the trust with a life insurance policy that pays out into the trust, making the issue of cost a non-issue for grieving family members and loved ones.
Personal Memorandum – even if you did not pre-arrange and/or pre-pay for your funeral and burial, you can still take the time to create a personal memorandum that sets forth what your wishes are. Although not legally binding in most states, it will help your loved ones make important decisions at a highly emotional time. Sexton Law Office | www.Arkansas-EstatePlanning.com
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Power of Attorney
Digital Assets
Online banking – create a list of all bank accounts or investment accounts
should keep on hand if you have
that you access online. In addition,
minor children. In the event that you
provide your log-in name and
are away on business or vacation and
password for each one.
someone else is caring for them, a childcare POA will give the caregiver
Social Media – create a list of social
the legal authority to consent to
media accounts that you use such as
emergency medical treatment if the
Facebook, Twitter, and LinkedIn. Include
need ever arises.
log-in information, passwords and
instructions for how to handle the
Childcare POA – this is something you
Limited POA – this can be used to
account if you die or become
appoint someone as your agent for
incapacitated.
specific purchases such as to facilitate the sale of a vehicle while you are out
Bills – if you pay bills online, or if bills
of town.
are set to be paid automatically, include them on this list. As with other digital
Durable general POA – this is a very
assets, also include log-in and
powerful document as it gives your
passwords.
appointed agent the legal authority to act on your behalf in almost all situations.
Personal Documents
Marriage certificate
Divorce certificate
Birth certificates
Baptism certificates
Diplomas/Awards
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Each of these documents serves a specific purpose within your estate plan; however, understanding each document’s individual function is not enough. Many of these documents also work in concert with other documents in your estate plan. A life insurance policy, for example, might be transferred into a funeral trust which includes your wishes as expressed in your personal memorandum. By working with an experienced estate planning attorney you can ensure that all of your documents work in harmony with one another to maximize the available benefits and minimize your tax exposure as well as the possibility of a challenge to your estate.
References Forbes, 5 Key Estate Planning Documents to Help Avoid Family Conflicts AARP, The Cornerstones of an Estate Plan
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