Estate planning is the process of deciding who will receive an individual’s assets, who will manage their financial affairs if incapacitated, and settle the estate after death. Estate planning is necessary for anyone who owns property that they wish to pass down to a relative, close friend, or charitable interests, and to name a guardian for minor children or provide care for pets.
Most people believe that estate planning is only necessary for elderly or wealthy individuals. This is a common misconception. As soon as an individual reaches the age of 18, they should establish a simple estate plan, at a minimum. This will allow the individual and their family to avoid any legal hassles, extra expenses, and to prepare for unforeseen events.
People are often intimidated by estate planning due to the amount of legal work involved. However, the process doesn’t have to be difficult, and it is a kind and necessary process to assist those who are close to you.
In this blog post, we’ll help you get started with estate planning by going over the necessary legal documents, why they are important, and how to get them.
Where Should Estate Planning Documents Be Kept?
Before we go over the necessary estate planning documents, it’s important to know where to keep the documents in order for them to be found in the case of an unexpected event.
A personal representative, successor trustee, or agent in the power of attorney should know where all important documents are located. This can make things easier on the family when an objective representative can easily access documents, keys to safe deposit boxes, financial documents, and other important information.
Individuals will also create a list of where all important information can be located. This list should be given to a trustworthy person. Extra copies of this list should be given to the personal representative, successor trustee, or agent in the power of attorney. If they are named as the successor trustee, many banks offer free vault storage of these important documents.
7 Important Estate Planning Documents
The following list of estate planning documents are in order of importance. When estate planning, start with the first document and work down from there.
1. Last Will and Testament
This is a legal document that states a person’s desire for asset distribution after they have passed away. Included in the will is a list of beneficiaries and an appointed personal representative of the estate. The will also allows a guardian to be named for minor children or a caretaker for pets.
Financial assets and real estate holdings will be directed to heirs in the will. In an attached document, list in detail, family heirlooms and other belongings, as well as who those belongings will go to. Ideally, the will should be reviewed every few years.
2. Revocable Living Trust
This is a document that names beneficiaries who will receive assets in a lump sum or throughout a defined period of time. A living trust is different from a will in that the trust goes into effect immediately rather than after the person has passed away.
When setting up a trust, the person’s property contained within the trust may receive certain tax benefits and avoid—or at least minimize—probate, which is the legal process of determining the authenticity of a will. Proper account asset titles and proper beneficiary designations are essential for your wishes to be carried out accurately.
3. Living Will
A living will allows the individual to document their end of life care while they are still alive and of sound mind. This document informs family members and doctors of your wishes should you become incapacitated and eliminates the emotional and psychological burden on your loved ones to decide on your behalf.
4. Durable Power of Attorney
A durable power of attorney for financial affairs allows an assigned individual or corporate fiduciary to make financial decisions on behalf of someone after they become incapacitated. In other words, an agent named in a power of attorney acts in the best interests of the individual when they are no longer able to do so themselves.
5. Health Care Power of Attorney
Also known as a medical power of attorney or designation of health care surrogate, a health care power of attorney allows an individual to designate a person to be a patient advocate and to document their wishes for health care decisions in the event that they are unable to do so themselves.
6. Appointment of Guardianship
For parents of children below the age of 18, appointing a guardian protects a child’s interests by ensuring that a legally authorized adult is available to make decisions on the behalf of the child. This can be done in the parents’ last will and testament.
7. Special Needs Trust
This is a trust that assists children or adults who have mental or physical disabilities and require special care or government assistance. This trust provides the special needs individual the necessary care and funding, while protecting eligibility for public assistance programs.
Preserve Your Assets with Crews Banking
Knowing what will happen to your assets benefits both you and your heirs. Crews Banking Corporation banks provide trust services that empower you to determine who will inherit your assets, how you can minimize estate taxes, and who will care for you in the event that you become incapacitated.
We can also help you achieve your financial goals by providing you with knowledge gained from one of our online financial calculators or a personal meeting with one of our Trust and Investment Management Advisors.
Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.
About the Author
Executive Vice President, Director of Trust and Wealth Management
Lory manages the Trust and Investment Management Services division to help coordinate the diverse services provided. She has been involved in banking and finance since 1990. Her management and operations experience gives her the resources necessary to lead a team of professionals offering banking and trust products and services with a high degree of personal attention.
She is a graduate of the Florida Bankers Association’s Graduate School of Banking, Florida Bankers Association’s Trust School, and Leadership Charlotte Class of 2003. In addition, Lory has earned both the Florida Certification and National Certified Guardian designations. She serves on the Executive Committee of the Florida Bankers Association’s Trust and Wealth Management Division, volunteers with Tidewell Hospice and has served as a member of the Board of Directors of United Way of Charlotte County.