As events this year have reminded us, uncertainty is always a factor when it comes to the economy and markets. It’s also a common companion in other areas of our lives, often with real financial ramifications in those instances as well. But you have a plan for that. It’s built with an eye toward managing those inevitable uncertainties and controlling what you can. Importantly, it should include a wealth transfer component designed to achieve the legacy you envision while providing for your loved ones in the way you intend. So, check off each of the following must-have documents you’ve prepared to solidify your wealth transfer plans. See where you stand. Then consider sharing this list with someone you care about.
A will is a legal document that allows you to dictate where your assets will go. If you don’t leave one, the state steps in and controls the distribution of your assets. In your will, you also name an executor to manage and settle your estate and a legal guardian for your minor children.
Durable Power of Attorney
A durable power of attorney permits you to authorize someone you trust to manage your financial affairs in the event you become incapacitated. This person can do things like pay bills, collect benefits, keep tabs on your investments, and file taxes.
Healthcare Power of Attorney
A healthcare power of attorney allows you to appoint a representative to make medical decisions on your behalf in case you are unable to express your wishes yourself. It’s sometimes known as a healthcare proxy.
Advance Medical Directive (Living Will)
An advance medical directive, also called a living will, lets others know what medical treatment you would wish, especially in cases of terminal injury or illness. Think of it as a roadmap for doctors and loved ones that spells out what you want – or don’t.
Revocable Living Trust
While not a part of every estate plan, a revocable living trust is a means to transfer property to heirs in a way that helps avoid costly, public, time-consuming probate. You control the property in the trust (proper titling is important) and the trust itself while you’re alive but name a trustee to take over upon your incapacity or passing.
The beneficiary designations on retirement accounts, annuities and life insurance policies generally take precedence over instructions in a will. Keep these up to date, so they accurately reflect your wishes and align with your overall plan.
Letter of Intent
A letter of intent is an informal, nonlegal document that you use to record your personal thoughts and directions regarding what’s in your will. Some provide funeral details or other special requests, and they can be hugely helpful to family members.
Important Document and Account List
Does your family know where to find everything you’ve prepared? Create a list of documents and accounts (financial or otherwise) and where they can be found. Include appropriate contact information where it makes sense.