What Documents Are in an Estate Plan?

Here’s a short list of the most used estate planning documents:

Last Will and Testament

This is the most familiar document. The Last Will and Testament lets you choose who inherits your assets, selects guardians for dependents and names an executor.

Note: The executor is there to make sure your wishes are carried out – it’s the most important part of your Estate Plan. Think long and hard, and choose wisely. It’s not an easy task and is often left in the hands of an attorney.

Living Will

This is where you make healthcare and end of life care decisions. With a Living Will, you decide what type of care you would want if hospitalized and can't make those decisions for yourself. Probably the most critical decision you need to make is whether or not you want to sign a DNR form. Make it easy for your loved ones, and don't leave any end of life decisions up to them.

Related: Calculating the Cost of a Funeral

Healthcare Power of Attorney

You may not feel comfortable making “What if?” healthcare and end of life decisions. There are many variables to consider, and it’s not something that should be decided quickly. If you aren’t comfortable making those decisions now, you need to appoint someone you trust who can make those decisions for you – and that would be your Healthcare Power of Attorney.

Note: Often, the Healthcare Power of Attorney is a spouse, child or other close loved one who knows you well and would have the best idea of what you would do. This is a lot to ask of someone, so make sure your have frank and open discussions with your Healthcare Power of Attorney about your feelings on emergency care, end of life care, etc.

Financial Power of Attorney

As with the Healthcare Power of Attorney, the Financial Power of Attorney is someone you trust, only this time it’s to make decisions about your financial matters, not your personal health decisions. If you are unable to take care of your own finances, your Financial Power of Attorney will have access to accounts you designate to pay things like your mortgage, health insurance and car payments.

Related: Pre-need Funeral Planning

Trust

If you'd like to set aside money or other assets for someone or an organization (usually a charity), you may need a Trust. A Trust is not part of the Probate process, which can be extremely long and drawn out, depending on the estate. With a Trust, your heirs can inherit faster and without all of the hassles of the Probate process.