5 Must Have Documents to Avoid Costly Estate Planning Errors

October’s National Estate Planning Awareness Week was created to help the public better understand this critical area of financial wellness. Estate planning allows you to preserve and manage your assets while you are alive, and after death, your plan allows you to conserve and control the distribution of your assets according to your stated goals and objectives.

Regardless of your wealth, age, and health, there are five documents you should consider as a part of your plan.

1. Durable Power of Attorney (DPOA)

This document authorizes someone to make decisions on your behalf should you become mentally or physically incompetent to handle financial matters. Whoever you designate in your DPOA can file taxes, pay bills, direct investments and more, all on your behalf.

2. Advanced Medical Directive

This legal document allows you to designate specific medical treatments in a case where you are not able to express your desires and specify someone to make decisions for you. Without an advanced medical directive, care providers must prolong your life using artificial means, if necessary. Living wills, durable powers of attorney for health care, and a Do Not Resuscitate order are all examples of advanced medical directives.

3. Will

The central piece of your estate plan, a will designates the distribution of your property after your death. Without a will, state law dictates the disbursement of your assets, which might not align with your priorities. Wills name an executor to manage and settle your estate and a legal guardian for any dependents. Make sure your will is articulated accurately so it can be properly executed under your state’s laws.

4. Letter of Instruction

This document is non-legal and can accompany your will to express personal thoughts and directions. Unlike a will, it remains private, and its directions are not legally binding.

5. Living Trust

Also known as a revocable trust, living trusts create a separate legal entity to own property. Its primary function is to allow your assets to avoid probate, which can be time-consuming and costly. Probate ties up your assets until completion, meaning they cannot be distributed to your heirs. If you have privacy concerns, a living trust will serve to protect public knowledge of your estate.

Estate Planning with Cohen & Burnett

Cohen & Burnett is committed to helping you ensure the safety and security of your assets for future generations. Our estate planning experts begin by discussing and evaluating your estate planning goals prior to drafting appropriate legal documents to accomplish your objectives. To learn more, please visit our homepage today!

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