6 Essential Documents to Include in Your Estate Plan 

Preparing for the future is essential to protect yourself, your family, and your assets. However, as of 2022, only just over 30% of Americans actually have an estate plan in place. If you don’t have a lot of property or other assets, you may not think that you really need an estate plan, but the truth is that anyone can benefit from having one. Along with safeguarding assets, an estate plan can also be used to outline your healthcare wishes should you become incapacitated as well as designate a guardian for any minor children you have.

The benefits of having an estate plan cannot be overstated. When you pass away, you don’t want a court to decide what should happen to your property. When creating the estate plan, you will need to include certain documents to ensure that everything is covered. These are highlighted below.

1. Your Last Will and Testament

Your last will and testament makes up the foundation of your estate plan. It will clearly outline your final wishes, so you won’t have to worry about overburdening your grieving loved ones with having to guess what you would want to happen to your property. Upon your death, this legal document determines who will receive assets like:

• Real estate property
• Checking and savings accounts 
• Safety deposit boxes 
• Family heirlooms
• Other valuables/personal belongings

With a last will and testament in place, you can ensure that your property is distributed in the way that you want after your death. 

Your will should also include a guardian designation for your minor children. If both parents are deceased, a court would have to appoint someone as guardian, and this person may not necessarily be the individual that you would have chosen to raise your children. In some cases, it could even be someone who your children have never met. If possible, you should include alternative guardians in the event that your first choice is unable to take responsibility. This will ensure that the right people are caring for your children. 

2. Living Trust

There are two types of living trusts: revocable and irrevocable. Most individuals choose a revocable living trust because it can be altered within their lifetime, whereas an irrevocable trust is typically permanent. Similar to a will, a living trust can be used to outline your wishes regarding your property and end-of-life healthcare. However, unlike a will, it doesn’t have to undergo the challenging probate process to distribute your assets to your loved ones. This can save your family a lot of time, money, and stress after your death. 

During your lifetime, you will be able to transfer assets into the living trust. These include:

• Bank accounts
• Stocks and bonds
• Real estate property
• Non-retirement investment accounts
• Valuable art, furniture, or family heirlooms 

As your financial situation changes over the years, your revocable living trust can change, too. While you’re alive, you can sell assets or add more assets to the trust later down the line. It only becomes an irrevocable trust when you die. 

When you create the trust, you also designate a successor trustee. This person will have control over the trust in the event of your death or incapacitation. Upon your death, the trustee is responsible for allocating the assets within the trust according to your final instructions. 

3. The Advance Healthcare Directive

If an illness or accident leaves you incapacitated, you won’t be able to make important medical decisions for yourself. Having an advance healthcare directive will protect you in this unfortunate event as it will explicitly state your wishes for your medical care. This legal document will allow you to appoint a Medical Power of Attorney. This person should be someone who you trust to act in your best interest, like a spouse, child, or close friend, since they will be able to make your medical decisions should you not be in the condition to do so.  

In your advance healthcare directive, you can provide instructions for the type of life-sustaining treatments you would want if you’re not expected to recover. These might include your wishes regarding respirators, artificial nutrition and hydration, medications, and invasive surgeries. While it can be difficult to think about being in this situation in the future, having the advance healthcare directive in place is the best way to ensure that healthcare providers follow your final wishes. 

4. Financial Power of Attorney

If you do become incapacitated and are unable to make sound monetary decisions, a financial power of attorney will allow you to select an individual to do so on your behalf. This should be someone that would trust with all of your financial information since they will essentially be acting as you and will have access to all of your accounts. 

Your financial agent will be able to:

• Pay all of your debts and current bills 
• Sell your home or other real estate 
• Manage your investments 
• Make other financial decisions for you

If you don’t have a power of attorney in place, then the state would have to appoint someone to oversee your finances for you. This can be an expensive and time-consuming process for your family. It’s best to ensure that you are protected with a comprehensive power of attorney document in your estate plan. 

5. Beneficiary Designations

Have you considered who you want to inherit your property, life insurance, and other financial assets upon your death? You will need to elect a beneficiary in your estate plan to ensure these go to the right people. Keep in mind that life insurance and retirement accounts will typically have you name a beneficiary when you create the account, so you should just check these regularly to ensure they remain current. It’s also a good idea to select a secondary beneficiary just in case something happens to your first choice before you can change your designation. 

6. Letter of Intent

You also have the option to add a letter of intent to your estate planning documents. This letter isn’t legally binding, but it is a good place to communicate your wishes regarding your funeral arrangements as well as any personal property that you didn’t include in your will or living trust. You can also use it to send a last message to your family members and other loved ones. 

Contact Our Law Office Today

No one likes to think about what will happen once they pass away, but it’s crucial to create your estate plan in advance to ensure that your final wishes are carried out. There is no right time or right age to begin—whether you’re just starting out with a small family or you’re of retirement age, the Law Office of Kyle W. Jones can help you design an estate plan that meets your individual needs. We know that every detail matters when it comes to protecting your loved ones, so we’ll thoroughly review each document to ensure nothing is overlooked. 

As your needs change over time, you can also rely on our experienced team to work with you to modify your estate plan accordingly. To learn more about our estate planning services, contact our law office in Bakersfield today.

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