4 Essential Estate Planning Documents for Every Family

When we talk about retirement planning, we’re usually talking about saving money. As important as that topic is, this time around we’re talking about something equally as important—essential documents.

The older we get, the more legal documents we seem to accumulate. Estate planning itself involves a slew of legal documents—pension and investment paperwork, insurance policies, tax returns—but today we’re focusing on four basic documents that every person approaching retirement should prepare.

Will or trust—Many people put this one off because they don’t think they have enough wealth to warrant it or they trust their heirs to divvy it up equally. However, a will is possibly the most important document you can have—no matter your total wealth—and should be completed as soon as you own real property, have minor children or want assets to be distributed contrary to the state laws regarding distribution after death. This legal document outlines your wishes for your property—money, investments, jewelry, real estate, vehicles, household goods, etc. If you leave it up to your heirs, it’s possible that things won’t go as you expect. A will or trust ensures that your wishes are carried out just as you want them to be.

This can be done online, but it’s recommended to enlist the help of a lawyer to make sure your document meets all state and federal laws. Having a lawyer involved is also helpful if there’s a chance your will may be contested.

NOTE: Beneficiaries listed on investment accounts, insurance policies and the like overrule anything you have stated in your will—even if the will is more accurate and up to date. Make sure you update your beneficiaries on all accounts to reflect your wishes.

Power of attorney—This document names the person who will speak for you financially in the event of injury or incapacitation. You’ll need someone to access your money, pay bills and make financial decisions. A power of attorney can go into effect on a temporary or permanent basis, depending on your situation.

Find a form online or, again, have an attorney assist you. Designate someone you trust because not only can they access your bank accounts, but they can also cash your checks, trade your investments and buy and sell property in your name.

Health care directive—This document serves as a power of attorney for your health care decisions. The person could be the same as the one you’ve named for your finances, but it doesn’t have to be. This document gives your loved one the power to withhold or withdraw medical care, admit or discharge you from a medical facility and to hire or fire anyone responsible for your care. You can also spell out your wishes regarding medical intervention and organ donation.

Information sheet—Although not an official, legal document, providing this information will help those who are handling your estate. Note any significant property you own and what you want done with it. Include all financial accounts, complete with the name of the financial institutions where they are held, account numbers and approximate balances. Be sure to note the location of any other important documents, such as: insurance policies, property deeds, car titles, a home inventory and pre-payment receipts for funeral services.

BONUS TIP: If you move out of state after finalizing these documents, check with your attorney to make sure they will be valid in your new location. Different states sometimes have different requirements. An attorney can assist in making any necessary revisions.

If completing these items is on your list of things to do, don’t go it alone! Enlist the help of a financial advisor and receive invaluable guidance for your estate and retirement planning.