The 5 Estate Planning Documents Everyone Needs

First, let’s debunk a myth – EVERYONE needs an estate plan. Whether you are in the top 1% or live paycheck to paycheck, there are various documents that serve everyone. The first thing most people think about when they hear "estate plan" is a Will. We have all heard the nightmare stories about people who died without a will – including Jimi Hendrix, Bob Marley, Sonny Bono, Pablo Picasso, Michael Jackson, even Abe Lincoln – who was a lawyer! Despite the drama of passing away without a Will, there is so much more to estate planning. Here are the 5 estate planning documents everyone needs:

1. Will/Trust
2. A durable power of attorney
3. Beneficiary designations
4. Healthcare power of attorney
5. Guardianship designations

In addition, you should have proper insurance plans – but I’m not here to sell you insurance.

Let’s review those 5 estate planning documents everyone needs.

Wills and Trusts

A will or trust is the main piece of your estate plan – even if you do not have substantial assets. Your Will ensures property is distributed as you wish. Some trusts limit estate taxes or legal issues.

These documents need to be well prepared and accurate. For instance, if you deem someone a beneficiary on a retirement policy, your Will should confirm that. Making sure the information matches will save your beneficiaries a legal battle or legal issues.

Durable Power of Attorney (POA)

A POA allows a person you assign to act on your behalf in the event you cannot do so yourself. If you do not have this document, the court will decide what happens to your assets if you are found mentally incompetent, and that decision may not be what you wanted.

The POA can give the person you choose the power to handle real estate, financial transactions, and make other legal decisions for you.

Beneficiary Designations

As I discussed before, some of your possessions can pass to beneficiaries without being dictated in your Will. That is why it is important to maintain a beneficiary and a contingent beneficiary of your assets – retirement accounts, insurance plans, etc.

If you don’t name a beneficiary and they are deceased, the court could decide the beneficiary – and it’s likely they may not make the decision you would have.

Healthcare Power of Attorney (HCPA)

An HCPA designates a person to make healthcare decisions in the event you are incapacitated.

You should choose a person you trust, shares your views, and who you believe would recommend a course of action you agree with. We also suggest that you choose a backup agent in the event your first choice is unavailable or unable to serve.

Guardianship Designations

If your will or trust may not include a clause about guardianship. If you have children under the age of 18, or you are planning on having children, choosing a guardian is important.

This person should share your views, be financially secure, and is willing to raise your children. A backup guardian should be named.

We recommend you have this conversation with the person or people you choose, as it is a big responsibility.

If you do not choose a guardian for your minor children, the court may do so on your behalf.

What now?

We know this is a lot of information, and estate planning is something many people put off (including all those famous people!) for various reasons – talking about death is not fun, it costs money, and we think we can push it off.

Click here to schedule your free, no-obligation estate planning strategy session with one of our experienced estate planning attorneys.

We know that this has likely been on your to-do list for some time and not something you are excited about doing. Most of our clients were in the same boat. Some even waited until they were traveling abroad, or a global pandemic forced their hand.

During your session, we will discuss the estate planning documents everyone needs, answer all your questions, and determine what your next steps should be.

Even if you do not retain Gray Law Group, you’ll know exactly where you stand.