Protection Article | Transamerica

Key Estate Planning Documents You Need

The following are five key estate planning documents that should be kept somewhere safe and accessible.

  1. Durable power of attorney: A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. It allows you to authorize someone else to act on your behalf doing things such as paying everyday expenses, collecting benefits, watching over your investments and filing taxes.

  2. Advanced medical directives: Advanced medical directives let others know what medical treatment you would want. It could also allow someone to make medical decisions on your behalf if you are unable to express them yourself. If you don’t have an advanced medical directive, medical care providers must prolong your life using artificial means, if necessary. 

  3. Will: A will is often said to be the cornerstone of any estate plan. The main purpose of a will is to disburse your property after your death. If you don’t leave a will, disbursements will be made according to state law.  Keep in mind that a will is a legal document and the courts are very reluctant to overturn any provisions within it. It’s crucial that your will be well written and articulated, properly executed under your state’s laws, and kept current. 

  4. Living Trust: A living trust is a separate legal entity you create to own property, such as your home or investments. It’s called a living trust because it’s meant to function while you’re alive. You control the property in the trust and you have the ability to change the trust terms, transfer property in and out of the trust, or end the trust altogether whenever you wish. Typically, the primary function of a living trust is to avoid probate.

  5. Letter of Instruction: A letter of instruction is an informal, non-legal document that generally accompanies your will and is used to express your personal thoughts and directions regarding your will. It can also be used to document other pertinent things such as your burial wishes or where to locate other documents. The letter of instruction can be the most helpful document you leave for your family members and your executor. Unlike your will, a letter of instruction remains private - giving you the opportunity to say the things you’d rather not say in public. A letter of instruction isn’t a substitute for a will. Any directions you provide are only suggestions and are not binding.

The important thing to remember about key estate planning docs is:

  • If you don’t have them – get them
  • If you have them – make sure they are current - and, make sure that someone other than you and your significant other know where they are located.