By Joseph Weigel | January 7, 2022
Estate planning is something you should do to get all your affairs in order at any stage in life. Completing this process ahead of time allows you to alleviate an already stressful and traumatic experience deriving from an untimely death, and the process of estate planning is not as difficult as it may seem.
There are several documents that one should have to move forward with estate planning, each one serving a specific purpose to enable one to have the customization tools to create estate plans that reflect one’s preferences in regard to personal finances, assets, and beneficiaries to one’s liking. Specifically, let’s focus on seven documents that will get you to a sound estate plan.
- Last Will and Testament
To enable someone to distribute assets and personal belongings to beneficiaries, completing a last will and testament is necessary. In this document, you may name an executor, who is the individual chosen to have the responsibility of closing your estate according to your wishes. Thus, if you have any preferences about how you would like your assets or personal belongings distributed, a last will and testament must be completed to allow your named executor to fulfill your wishes. For example, if you want your child to receive a certain vehicle, it is the executor’s duty to ensure that vehicle is given to the child you named.
- Revocable Living Trust
To name a trustee to manage the assets you own, a revocable living trust must be made. Essentially, the trustee will oversee any assets within the trust, and this tool can be used while you are alive and after you pass away. With a revocable living trust, you may retain the right to amend your living trust at any time. A revocable living trust should be created if you have someone specific in mind to manage the assets you own while you are alive and/or after you die.
- Power of Attorney
A power of attorney (POA) allows you to name someone to manage your real estate, businesses, bank accounts, and other financial affairs. The person named in a power of attorney is called an attorney-in-fact. You may allow this person to manage your assets or grant more specific powers, such as cashing checks in your name. There are two types of power of attorney: durable and non-durable. A durable power of attorney stays in force after you lose capacity, and a non-durable power of attorney will become invalid in the event you become incapacitated or die. There are many different situations where a power of attorney may be useful, including the following: (1) if you are having surgery; (2) you have been diagnosed with a serious or terminal illness; (3) you have a dangerous job; and (4) you simply want a specific person to manage your finances.
- Beneficiary Designations
Beneficiary designations are documents that name beneficiaries for certain assets. Such assets may include bank accounts, investment accounts, individual retirement accounts, and insurance policies. These designations are crucial, as they allow your assets to be claimed by your beneficiaries in the event you pass away and will likely not need to go through any sort of probate process. You may specify beneficiary designations for assets in your will, but you may also obtain beneficiary designations through the company that manages each particular asset, such as your life insurance provider. Any assets you own that are held or managed by a third party should be accompanied by a written beneficiary designation form to ensure someone has access to your accounts after you pass away.
- Guardianship Designations.
Guardianship designations are used to name guardians for minor children and other dependents. Even though this can be done in a last will and testament or power of attorney, guardianship designations can also be addressed in a separate document. If you want to avoid having a judge appoint a guardian for your dependents, you must designate a guardian before you pass away.
- Letter of Instruction
A letter of instruction details your own, personal instructions to provide guidance to those responsible for closing your estate after your death. A letter of instruction may be used to (1) provide instructions about how to access your assets; (2) list all assets and debts; (3) state funeral or burial preferences; (4) provide directions to important documents like deeds or marriage certificates; and (5) list online passwords and other pertinent account information. It is important to note that a letter of instruction is not a legal document, but it may be utilized to provide details that are often missed in estate planning, such as social media logins and even what you would like to be written on your headstone.
- Advance Health Care Directive
An advance health care directive is a document that allows you to express how you want medical decisions to be made in the event you are unable to make such decisions yourself. This document provides an outline for medical technicians and health care providers to follow if you are unable to communicate due to incapacity. Illinois law allows individuals to make four types of advance directives, which include: (1) a health care power of attorney; (2) a living will; (3) a mental health treatment preference declaration; and (4) a Do-Not-Resuscitate (DNR)/Practitioner Orders for Life-Sustaining Treatment (POLST). For more information to each of these documents, please visit the Illinois Department of Public Health website at https://dph.illinois.gov or contact our office.
Conclusion:
Estate planning may seem intimidating, but taking care of the above-listed documents ahead of time is a relatively straightforward process. The more detailed and complete your estate plans are, the easier it will be for your family and loved ones to smoothly and efficiently proceed through the process following your death.
The law offices of McCarthy, Callas & Feeney P.C. handle cases in Estate Planning. If you feel that you need an attorney, please contact us at McCarthy, Callas & Feeney P.C., so we can discuss your legal options moving forward. Please call 309-788-2800 to connect with a lawyer. Our firm practices extensively in Moline and Rock Island, Illinois, as well as Bettendorf and Davenport, Iowa.