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The 5 Estate Planning Documents You Need

03/22/2024 | Blog, Estate Planning
Sophisticated senior couple talking to male attorney about signing estate plan documents

Estate planning is the process for deciding what happens to your assets when you die. It ensures that your final wishes are respected and helps your family avoid probate court.

But when you’re planning your estate, what documents do you actually need? We consider this question below.

What Are the 5 Most Important Estate Planning Documents?

Every estate is unique. However, at a minimum, you should have the following five legal documents for estate planning:

  • Last will and testatement
  • Trust(s)
  • Financial power of attorney
  • Health power of attorney
  • Beneficiary designations

Let’s consider these estate planning documents in turn.

1. Last Will and Testament

A will is a legal document which specifies, in clear terms, what you want to happen to your property when you die. You can name beneficiaries, such as family members, and essentially list “who should get what”.

In CA, you can write a will if you’re of sound mind and over 18. It’s never too early to plan your estate. If you have any property, you should have a will.

2. Trust Document

A trust is a legal tool for protecting assets from probate. You place assets into a trust, name a beneficiary, and appoint someone to manage the trust.

You can have a “revocable” living trust, which gives you full control over the assets in the trust. It can be changed at any point before death. Or you can have an “irrevocable” trust which is much harder to change. However, it does offer slightly greater tax benefits.

Our estate planning team can help you decide which trust you need.

3. Financial Power of Attorney

A financial power of attorney (POA) lets someone else make your financial decisions if you lose mental capacity.

  • The person must act in your best interests.
  • Their powers include signing documents, managing bank accounts, and handling taxes.
  • If there’s no financial POA, the court will decide who should act for you.

4. Health Power of Attorney

A health or medical power of attorney empowers someone else to make medical decisions for you if you can’t. This could mean, for example:

  • Consenting to medical care
  • Planning end-of-life care
  • Arranging emergency treatment

Again, the person must act in your best interests. And if there’s no health POA appointed, the court will choose someone to act for you.

5. Beneficiary Designations

You can name individuals to inherit key property, such as real estate and retirement accounts, the moment you die. You don’t need a will to name these beneficiaries; however, it makes sense to have both types of estate planning documents.

Naming beneficiaries this way helps to avoid probate, because the assets transfer ownership immediately upon death.

However, it’s important you understand the potential legal consequences of transferring assets this way. For example, there may be estate tax implications. Our attorneys will help you decide the best way to move forward.

Estate Planning Documents Checklist

Before you start planning your estate, here’s a final estate planning checklist to work through.

  • Itemize your estate. Know exactly what assets you have.
  • Calculate the total value of any debts e.g. mortgages, car loans.
  • Make a list of your passwords and key security details. Keep them somewhere safe.
  • Choose an executor and name your beneficiaries.
  • Decide who can make decisions on your behalf.
  • Hire an attorney to help you draft a will, trust, and other legal documents.
  • Review your documents on a regular basis.

Get Your Must-Have Documents for Estate Planning

With the right estate planning documents, you can speed up – or avoid – the probate process. Our attorneys will ensure you have the important documents you need for your family’s peace of mind.

Protect your assets and your family’s inheritance. Contact the Law Offices of Alice A. Salvo to book an appointment.