So, clearly, I’m not an attorney. This blog is NOT me giving legal advice. However, I’ve had the life-altering experience of losing a parent and so has my husband. This completely non-real-estate-related post is just from our personal experience.
When it comes to end of life, there are 12 important documents you should have organized. Regardless of age, this is SO important. It’s also important to update these documents as you go about your life. A will that you created in your 30s might really need to be different now that you’re in your 60s.
I’d HIGHLY encourage you to interview and hire a local attorney who can guide you through the proper legal forms for YOUR state and YOUR wishes.
Will
Why you need it: To choose an executor and spell out your final wishes for how your estate should be distributed after you die.
What happens without it: You die “intestate” and your assets go through probate, where your state’s intestacy laws determine how to pay your debts and distribute your assets according to survivorship rights in that state.
Living Revocable Trust
Why you need it: To retain control of your assets while you’re alive and to appoint a trustee to transfer assets directly to your beneficiaries, avoiding probate. What happens without it: Your estate goes through probate. However, a trust needs to be properly funded to work, meaning you’ve transferred ownership and titles of all of your assets from your own name to the trust name.
Living Will
Why you need it: To state your preferences for end-of-life medical treatment when you become incapacitated or terminally ill, and you can’t speak for yourself. What happens without it: State law determines who makes these decisions in order of closest relationship. Also, any disagreements on life-sustaining care can wind up in court.
Healthcare Power of Attorney
Why you need it: To give someone you trust the final say about your medical care when you become incapacitated or seriously injured. What happens without it: State law dictates who can make medical decisions on your behalf. But if conflicts arise among relatives, the battle could go to court.
Financial Power of Attorney
Why you need it: To give someone permission and authority to manage your finances when you can’t do it yourself due to illness or distance. What happens without it: No one can access your financial accounts or pay bills on your behalf. That could put you behind on meeting your financial obligations and rack up debt.
Designated Beneficiary Accounts
Why you need it: To ensure your beneficiaries can easily file a claim and receive any benefits you’ve left in their name on life insurance, retirement, and annuity accounts. What happens without it: Your survivors will have to inventory all of your assets to figure out what companies hold these policies. That can take substantial time and effort.
Copy of marriage licenses/divorce decrees
Why you need it: To transfer ownership of assets to a surviving spouse. What happens without it: It could take a few weeks or more to order a certified marriage license or a divorce decree, which are both critical to establishing (or disproving) spousal benefits and entitlements.
Copy of latest federal tax returns
Why you need it: To help your agent file your taxes if you become incapacitated, or to file a final tax return after you die. What happens without it: Your taxes could be filed late, incurring penalties and liens. If you use an accountant, list his or her contact information with your tax returns, too.
Financial Accounts
Why you need it: To identify what banks and other financial institutions you do business with to pay bills or distribute assets. What happens without it: Again, it will take detective work and time to get to the bottom of it. Meanwhile, your bills will go unpaid and asset distributions could be delayed. Tip: Designating your bank accounts “transferable on death” to specific beneficiaries keeps them out of probate.
Letter of Intent
Why you need it: To give your executor clear directions on how to manage/distribute your estate. What happens without it: It’s a free for all among your survivors.
Funeral Plan
Why you need it: To make it clear what kind (if any) memorial service you want and whether you want a burial or cremation. What happens without it: It’s not a legal document, but it makes your loved ones’ lives much easier when the clock is ticking and decisions need to be made quickly. If you’ve pre-purchased a burial plot, cremation or services, you’ll want to leave a copy behind in a place loved ones can easily find it.
Business succession plan
Why you need it: To outline what should happen to your business and who should be in control if you die or become incapacitated. What happens without it: Your business (and your employees) could suffer financially, and operations might be impacted. Ideally, your business should have its own living trust, separate from a personal trust, with a special trustee named to keep things running smoothly.
Documents to include in your business file: certificates of ownership, operating licenses, titles or deeds to real property, contracts, stocks/investments, articles of incorporation, bylaws, and emergency plans.
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