Perhaps the most important part of wealth building involves what happens to your assets after you die. The industry of trusts and estates has a $196 billion market size. It’s a legal landscape that involves many steps and burdens of proof.
When dealing with these situations, you need to have all your estate planning documents in order. But which documents should you prioritize? We’re happy to explain.
Consider these important documents for estate planning as you continue on your wealth journey.
The Last Will and Testament
The most important estate planning document you can get your hands on is the last will and testament. This is a legally binding document that lays out a person’s wishes for their assets and property after they die. It explains what exactly relatives or beneficiaries have a right to ownership to, and expresses other wishes in writing.
An estate lawyer will have a copy of the will on file. The person who died will likely also keep a copy in their safe or in a safety deposit box. A lawyer will charge $300 to $1,000 to put together a will in most cases. It’s worth every penny, since the last will and testament irons out virtually every legal obstacle when done correctly.
The state will recognize the will first before sending the situation to probate. Any will should also name an executor and estate trustees.
Power of Attorney Forms
When planning out your estate, you might need to create power of attorney forms. These are the forms that give someone the right to make decisions on your behalf. This could involve medical situations where you’re unresponsive and a decision must be made. Power of attorney might also come into play when there are important medical decisions to be made on your behalf.
Get all of these orders in writing so that there’s no legal ambiguity.
Life Insurance Policies
Life insurance takes another step toward protecting your dependants. A life insurance policy helps take care of living expenses for your family and replaces the income lost due to your death.
There are different types of life insurance policies that you might look into, including:
- Whole life insurance
- Variable life insurance
- Term life insurance
- Universal life insurance
- Cash value life insurance
Consider the loss that your family will incur upon your death, and sign up for a policy that can fill in some of the gaps so that they don’t have to struggle.
Name Beneficiaries to Bank Accounts and Properties
Checking and savings accounts also allow you to name beneficiaries that will receive the money in the account at the time of your death. This is one of the simplest ways for money to transfer and doesn’t involve waiting for the will to be administered.
Figure out who you’d like to name as a beneficiary, and let them know in advance that you’ve made this designation, and at what bank.
A real estate attorney can also help you figure out what to do with any properties you own. The clearer you are upfront, the easier it is to transfer ownership.
The Best Documents for Estate Planning
Consider the points above when you’re researching the best documents for estate planning purposes. Having documentation for everything will help you take care of your loved ones at the end of your life.
As you go through these details, check out some of our other articles to help you through your wealth-building journey.