Seven Estate Documents Every Woman Should Have
Thinking about one’s death is not pleasant. Figuring out how to divy up assets you leave behind can be a painful chore. But if you don’t make your wishes known, if you die without a will or living trust, state law will determine how most of your belongings are distributed and you may not like where they end up! With an Estate Plan, you have control over who gets what. Let’s begin with the seven essential documents you should put in place.
The Seven Essential Estate Documents
1. Will-This document facilitates the transfer of assets, appoints a guardian for minor children, names an executor or personal representative (the person or institution that takes charge of your estate after you die and distributes your property as you have specified in the will)
TIP: Your Lawyer should keep the original.
2. Durable Power of Attorney: Appoints a trusted family member, friend or adviser as an agent to act on your behalf in a variety of financial and legal matters should you lose your mental capacity to pay bills etc.
TIP: Give to designated person, keep copy for yourself.
3. Health Care Proxy-Authorizes someone to make medical decisions on your behalf.
TIP: Give a copy of this to the person you have designated to make your health care decisions as well as to your primary physician and trusted adviser. Keep a copy in your files.
4. HIPAA Release- Authorizes doctors and hospitals to disclose health information to the people you have listed.
Tip: You can include lawyers, accountants, and financial advisers so they can stay current on your situation-(mental capacity).
5. Living Will- This gives your preferences about certain aspects for your end-of-life care. Covering topics like what treatments you would want and whether you want to be resuscitated.
CAVEAT: Many of you have young adult children and in most states you don’t have the authority to make health care decisions after your child turns 18. If your young adult is in an accident or becomes disabled-you will need a court approval to act on their behalf. So, why not make it a rite of passage to have your 18-year-old sign a healthcare proxy!
6. Trusts-Consider a trust if you want to do the following:
a. Safeguard your assets.
b. Provide for your care if you no longer can handle your affairs.
c. Hold money for minors.
d. Avoid giving too much money to a young adult.
e. Protect assets from former spouses or creditors.
f. Provide income tax benefits.
(There are different trust for each objective above; check with your attorney or adviser as to which one is best for you.)
7. Final Instructions: Leave behind instructions for your memorial or funeral service. It can be an overwhelming task for your loved ones to plan your service. It can also leave them vulnerable to those in the industry who use predatory tactics to make them spend a lot of money in a hurry. Instead write down your requests; cremation, burial, plain or fancy funeral.
The comedian Joan Rivers, who died suddenly in 2014, told those close to her that she wanted her funeral to “be a big showbiz affair with lights, cameras, action. I want paparazzi and I want publicists making a scene! I want it to be Hollywood all the way. I don’t want some rabbi rambling on.”
Organize Your Financial Information
After you have your essential documents in place, the next thing to do is organize all your financial information. This is essential for whomever will be your executor or personal representative. You will save them a lot of time and headache! In fact my friend, Doug, after being asked to be executor of an estate, recognized he would need some essential information in order to execute their wishes well. Following is the information he asked them to have ready:
1. A list of the names and contact information of financial advisers: lawyer, accountant, broker. ( Consider copying this list and sharing it with family members)
2. A complete list of all your assets and liabilities.
3. A list of bills you pay monthly.
4. Password list: choose a system for storing your passwords and making them available to someone you trust in case of emergency-storage ideas can include:
On paper,
Use an encrypted Word doc and give executor password for the encrypted file; 7-Zip, WinZip,
Store on a USB,
In a safe deposit box.
5. List of Investment accounts
6. Credit card accounts
7. Memberships/subscriptions
8. Safety Deposit box branch location, box number and key
9. Vehicles- loans, titles
10. Tax Returns
11. Insurance policy
12. Family members living elsewhere
Keep Your Plan Current
Last, keep you plan current. We go through many seasons of life from singlehood, having a spouse or partner, having young children to young adult children to grandchildren. Each season brings different estate planning opportunities. For example, if you have young children you most likely need life insurance to replace lost income and be able to provide for future costs like college. If you have young adults, you may be in a position where you have accumulated beyond the current lifetime exemption amount* and may want to transfer some of your money to your kids now to help save on estate taxes later. You can help them buy their first home or start a business.
Resources
Getting started can be overwhelming. If you need help getting started, feel free to contact me and we can discuss your options!
https://www.suzeorman.com/products/must-have-documents
https://www.caringinfo.org
*the amount the government allows you to give away over the course of your lifetime without having to pay the federal gift tax, currently 12.06 million per person.
