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Did you know that 62% of Americans don’t have a will? Many people don’t think they need a will because they don’t have a lot of assets.
However, you don’t need to be a millionaire to leave behind an estate plan.
If you don’t have a will or an estate plan, it’s time you put your affairs in order.
Read on to learn what to include in your estate planning documents.
If you have an estate planning checklist, you should start by checking off a will. A will is an essential document when putting together your estate documents.
A will states your last wishes and how you choose to distribute your assets after your death. You can choose who will receive your money, house, cars, jewelry, and other valuable items after your death.
While you don’t have to have your will notarized, doing so will reduce the chances of probating the will.
2. Power of Attorney
As part of your estate planning, you also need to execute a power of attorney document.
The purpose of a power of attorney document is to designate a person who will make decisions and handle your affairs on your behalf if you become incapacitated.
An estate lawyer can help you navigate through the power of attorney process so you can designate the best person to have power of attorney.
3. Living Trust
Unlike a will that expresses your wishes after you pass away, a living trust can be created during your lifetime. To create a trust, you will have to designate a trustee responsible for managing your assets.
Trusts are more specific than wills because you can include more instructions and designate assets and money during your lifetime. For example, if you have children, you can ask the trustee to designate that each child will get a certain amount once they reach a certain age.
Also, if you create a living trust, you don’t have to worry about your will going through the probate process.
4. Beneficiary Documents
If you have retirement plans, pensions, life insurance policies, annuities, and other similar ones, you need to designate beneficiaries.
However, it would help if you kept your beneficiaries updated as you go through life changes. For example, if you have another child, you must add them as a new beneficiary.
If you get divorced, you must remove your former spouse from as your beneficiary. Failure to update your beneficiaries can cause them to lose out on your benefits.
5. Health Care Directive
During the estate planning process, you should also include a health directive. A health directive is important because you express your wishes should you become incapacitated.
Although it’s similar to a power of attorney where you designate someone to make these decisions for you, you leave instructions regarding your medical care in a health care directive.
For example, if you don’t wish to be kept on life support or donate your organs, you would express this in your health care directive.
Are You Ready to Prepare These Estate Planning Documents?
Now that you know what to include in your estate planning documents, you’re ready to put your affairs in order.
When creating an estate plan, you should include a health care directive, power of attorney, living trust, and a will.
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