Dying intestate (will-less) leaves your heirs with a potential mess. And yet, 61% of Americans die without one, says a recent Harris Interactive poll for RocketLawyer, a legal website. In fact, 28% of us would rather do anything than make a will.
Without a will, a probate court decides where your property goes; it can take months—sometimes years. Money you intended for heirs and good causes may go to pay lawyers.
Do you have young children? If your will doesn’t name their guardians, a court will do it. And what about Fido and the kitties? Their future is up for grabs if your will doesn’t spell it out.
To truly sort out your estate planning, prepare these nine documents and your heirs will thank you eternally:
A will gives you a voice when you’re gone. Use it to appoint guardians and to distribute possessions, like money and jewelry. Make requests, like having your ashes scattered on Mount Kilimanjaro. Hire an attorney or make a simple will yourself, using a book or software, and have an attorney review it. Make updates as life changes—when you marry, for instance, or divorce or have children.
A revocable living trust can help you pass assets to heirs, sidestep probate, reduce estate tax and minimize potential lawsuits. Your trustee manages your estate when you’re gone. Unlike a will, a trust won’t become public record in a lawsuit.
3HEALTHCARE PoA + LIVING WILL
Name someone to make medical decisions in case you cannot, and to enforce your wishes about treatments you do and don’t want. Combined, these documents are an “advance directive.”
4DEPENDABLE POWER OF ATTORNEY
Appoint someone you trust unquestioningly to make legal decisions if you can’t.
When you open bank accounts or buy financial products, you name beneficiaries to inherit the assets. These simple forms trump even a will. Update them as your life changes.
If your death would financially devastate loved ones, you should consider buying life insurance. You may purchase enough for 10 times your annual salary. “Term” insurance (for a limited time) is often cheapest.
7PROVISION FOR DIGITAL ASSETS
What do you want done with your computer’s hard drive, electronic photos, data stored in the cloud, and online accounts? Include your passwords.
8LETTER OF INTENT
A letter has no legal force, but you can use it to convey private requests, thoughts, wishes, or perhaps information you didn’t share in life.
9LIST OF DOCUMENTS
List the important stuff: life insurance policies, deeds, pensions, retirement accounts, bank accounts—all of it. Include account numbers, passwords and tell where they’re stored. Keep the list separate—somewhere easy to find—to tell survivors where your documents are stored.
Keep in mind that life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your financial professional can provide you with costs and complete details.
Need additional guidance? Contact your financial advisor today.