Even people with modest assets can benefit from end-of-life planning, which encompasses much more than just writing a last will and testament. As we all know, death doesn't discriminate by age or any other factor.
A little forethought now about how you would like things to go once you're incapacitated or gone can give you great peace of mind now, as well as spare your loved ones a lot of hassle later.
Property deeds, vehicle titles, official certificates (birth, marriage, etc.), the contact information for your attorney, insurance broker, doctor—all of these are things you can gather and put in the same, safe place now to make it easier for your loved ones later.
As a bonus, getting all these materials together should also make compiling your estate plan easier, as you will have a lot of the necessary information at your fingertips.
2. Execute a last will and testament
A will is one of the most important estate planning documents you can have, as it details where you would like your property to go after your death.
Unless you make a will or trust, you are leaving things up to your state's intestacy laws, which apply when someone dies without a will or trust. And you should not assume that the state will make the same choices you would.
When you create a will, you (the testator) name an estate executor: a person you trust to handle the distribution of your estate. You can also name a legal guardian for any minor children, as well as leaving instructions for the care of your pets.
3. Complete a living will or advance directive
A living will or advance directive is a legal document in which you list your preferences should you become incapacitated or otherwise unable to express your preferences yourself.
Issues addressed in living wills generally include breathing tubes, feeding tubes, and other life-sustaining medical treatments.
4. Put in place a power of attorney
A durable power of attorney allows you to name someone to be in charge of making financial decisions for you if you become incapacitated.
A health care power of attorney works hand-in-hand with a living will to help ensure that your wishes regarding medical treatment are followed.
A Health Insurance Portability and Accountability Act (HIPAA) authorization may also be necessary to allow others to speak with doctors and nurses about your condition.
5. Consider a living trust
A living trust can be a great way for you to make sure your wishes are followed after your death, as well as possibly allowing for a faster distribution of your assets to beneficiaries, avoiding probate court, and keeping your financial affairs private.
With a living trust, you (as the grantor) retain control over any property placed within the trust throughout your lifetime. Upon your death, your pre-chosen successor trustee gains control of the trust and will then distribute your assets according to your instructions—all bypassing probate, which can save both time and money.
6. Update your beneficiaries
If you have life insurance, retirement accounts, pensions, or pay-on-death (POD), or transfer-on-death accounts, make sure your beneficiaries are up to date, as these accounts transfer according to their beneficiary designations; your last will does not control them. Any time your family situation changes is a good time to review your beneficiaries.
7. Secure your digital assets
Along with online bank, investment, and shopping accounts, many people also have social media accounts that need handling upon the death of the owner.
Facebook, for instance, has a special section in which you can select someone to take over your account upon your passing, but you should also think about what you want to happen with websites, blogs, and any other online activities in which you participate.
8. Plan final arrangements
Final arrangements can include organ donation, as well as funeral plans, including how they are to be paid for. Pay-on-death bank accounts are often the best way to handle funeral expenses.
You can include your plan for final arrangements in your estate plan.
9. Make copies and store your documents
Once you have gathered all your estate planning documents, make copies and store the original and any copies in a safe place, such as a fireproof safe in your home or a safe deposit box.
Make sure at least one other person will be able to access these documents after your death.
10. Talk with your loved ones
Just getting everything down on paper is a great step forward in estate planning, but talking with your loved ones about your wishes is priceless. The clearer they are on what you want, the more likely it is that your wishes will be followed—and the fewer problems they will have, as they won't have to guess your intentions.
This talk doesn't have to be all grim and dire, however. You can also take this opportunity to talk to them about your life and memories, and even pass along cherished photographs and stories.
11. Keep everything current
Once you put together your estate plan, don't just put it in that safe place and forget about it. You should revisit the documents to make sure they still reflect your intentions.
And a bonus: Get the help you need
While there is no legal requirement that you consult an estate planning attorney, you may want to speak with one to make sure you have adequately addressed all potential concerns while running through the above estate planning checklist.
Find out more about Last Wills