What Documents Do You Need to Start Estate Planning?

When someone arranges for the management of their estate at death, they need to ask themselves what documents they’ll need to start estate planning. Knowing beforehand will make the process quicker and easier. A will is the cornerstone of any estate plan and should be the first document on the list.

The Will

Wills are legally binding documents that detail a person’s wishes regarding the care of their children and the distribution of their assets at death. Without one, there is no guarantee their wishes will be carried out, and the process can take significantly longer.

Additional Documents

In addition to a will, the following documents should be gathered as part of estate planning. These can help avoid lengthy and costly court proceedings and allow people to designate someone to act on their behalf in financial matters and important medical decisions should they become incapacitated.  

Revocable Living Trust

A living trust can help individuals avoid costly and drawn-out probate court proceedings. It is similar to a will because it allows them to name a person to manage their estate (trustee) but differs in that it can be used to distribute assets both at death or during their lifetime.

Beneficiary Designations

In the event of someone’s death, a beneficiary designation designates a person or persons who will inherit the deceased’s assets. Names of beneficiaries are often chosen when opening bank accounts and taking out life insurance policies. Beneficiary designations ordinarily take precedence over wills.

Durable Power of Attorney

When someone can no longer make legal or financial decisions independently, a durable power of attorney lets someone else act on their behalf. They must be legally competent to assign an individual as their power of attorney. 

A Living Will

In contrast to a durable power of attorney, which covers financial and legal matters, a living will details a person’s preferences for medical care if they are unable to do so. Their advance directives help doctors, nurses, and caregivers determine how they should be treated if they are terminally ill, suffering from dementia or nearing the end of their life.

Letter of Instruction

Requests and personal information that don’t belong in a will can be included in a letter of instruction. They can include the type of funeral service a person desires, where it should be held or who should receive any personal effects that they own. Although these letters can be drafted without an attorney’s help, they are not legally binding like a will.