6 Basic Estate Planning Documents You Must Have [And Why They Are Important]

Estate planning is crucial, yet only 33% of Americans have a will or other estate planning documents. Many people believe that an estate plan is only for people with actual “estates.” If this has been your thinking, you’re wrong. An estate is simply your possessions, including your home, furniture, life insurance, car, and other personal possessions.

What Does Estate Planning Entail?

Have you ever thought about who will inherit your possessions after you're gone? If you haven't, it might be time to visit an estate planning attorney in Colorado and have an estate plan in place.

An estate plan is more like a roadmap. It ensures your wishes are carried out when you are too old or sick to make decisions or when you pass away. The plan specifies how your possessions will be distributed to your children, pets, and other dependents.

Which Estate Planning Documents Do You Need?

Estate planning is not only about a will. A will is a crucial element of an estate plan, but it will only apply after you die. You need other documents to manage your assets and carry out your wishes.

Here are six estate planning documents you must have:

Last Will and Testament

You use the will to specify who will inherit your property and assets. Simply put, a will dictates the recipients of your physical and intangible assets. Also, it names the guardians for your minor children and pets. More importantly, it names the person to execute your wishes as contained in the will.

Without an estate plan, disputes might occur. Sometimes, they can get ugly, and your children end up in court. There will be fights, and your family will split.

Revocable Living Trust

This instrument also outlines how your assets will be distributed after you pass on. The trust is more of a legal entity that owns your possessions while allowing you to use and control them when you're alive. When you pass away, assets are distributed to specified heirs privately and quickly.

Since the probate process is long and expensive in many states, naming a successor trustee is prudent. The trustee will manage your assets when you pass away and distribute them to your beneficiaries when the time is right.

Beneficiary Designations

This document is crucial if you have non-probate assets, such as pensions, 401 (k) accounts, and insurance policies. You must contact all the institutions where you have these assets and name beneficiaries for each.

Since these assets skip probate, you can designate your beneficiaries easily and quickly when you’re gone.

Living Will

A living will is a form of advanced healthcare directive. It lets you outline how medical decisions should be made when you can’t make them yourself. For instance, you can indicate medical care preferences, including:

• Preferred surgical procedures
• Treatment options
• End-of-life care.

A living will helps you to plan ahead. In other words, it allows you to specify your preferred medical care options and services when you still can.

Financial Power of Attorney

Sometimes, you can give an attorney authority to manage your property and finances for you. In other words, you assign them certain responsibilities, such as:

• Making bank deposits
• Paying bills
• Managing your real estate

In case you are incapacitated, the financial power of an attorney can be very helpful. The financial agent will support your family and pay your medical bills.

Proof of Identity Documents

Ensure all your identity documents are in one easy-to-find place. These documents include:

• ?Social security card
• Birth certificate
• Marriage and divorce certificates
• ?Divorce certificate
• Divorce settlements
• Prenuptial agreements
• Armed Forces discharge papers

These documents will help your executor distribute your property and assets quickly and without any obstacles.

The Law Firm in Colorado is Your Trusted Partner in Estate Planning

Our law firm has two experienced estate planning attorneys. As parents and attorneys, we understand the unique legal needs of families. We know that every parent, irrespective of their net worth, requires a detailed estate plan to ensure their families are protected, and their wishes are followed.