You’re going to die someday, we all are. And while that’s not fun to think about, its a reality you need to face now. If you wait too long, death could come before you ever get around to estate planning.
And dying without a will when you leave behind any sort of assets is a mess. There are entire sections of college math classes devoted to learning how to make asset division calculations.
So save your next of kin that trouble and the legal fees. Make sure you get these documents file, hopefully within the year.
1. A Will
We thought we’d start out with the most basic document – that everyone thinks of. It’s not the only document you need by any means, but it’s a good place to start.
The bulk of your will encompasses your assets and who they’ll go to after your death. If you have debt, who is responsible for paying it off or what assets can they liquidate to bring your account current post-mortem?
Within your will is a section called your personal directive, sometimes personal narrative. This is where you’ll direct those who survive you what to do at the time of your death.
What kind of burial service do you want? Where can the funds be found? Do you have burial insurance?
Some people go into great detail with theirs, others leave it simple with something like “Please bury me in this outfit on the plot next to my husband”.
A lot of people put off making a will because it means facing something we’re all afraid of – the end of our lives. But if you don’t make one, you’ll leave a big task to those that survive you on earth.
They’ll need to pay for a lawyer to work through your assets and have to fight for the right to make decisions about what you owned.
Getting a will made ASAP (and updating it every two to three years) is best for everyone involved. Find a lawyer you like and trust, as you may get emotional during the drawing up process.
It’s okay – your lawyer doesn’t want to think about their own death either.
2. A Medical Directive
Let’s say you get in an awful accident and you’re put on life support. Or you’re paraplegic and unable to communicate. What do you want your loved ones to do in that situation?
Too many people spend their life savings on keeping someone on life support plugged in, hoping they’ll wake up. But you don’t want to be a burden if your recovery is unlikely.
That’s where your medical directive comes in. In it, you can detail things like what decisions you want made if you’re in a life-threatening condition and who makes them.
If you do end up on life support, you can state a specific amount of time you’d like to stay on, before they flip the switch.
Many people with long term chronic illnesses write a DNR or do not resuscitate order into their directive. That means if they’re found unconscious, they don’t want anyone to revive them. They’re ready to go if that happens.
Obviously, this too is an emotional decision that takes time to think out. When you’ve discussed what you want with your spouse, then you can put it in writing and add it to your portfolio of legal documents.
A lot of people recommend having a glass of wine or doing a relaxing activity both before and after you think through this emotional process. Just make sure you don’t overdo it – these are official legal filed documents after all.
3. A Living Trust
We could write an entire article about the differences between a living trust and a will, but here’s the most important one. A will only goes into effect after you die – not if you’re otherwise incapacitated by illness or unable to make decisions.
Having a living trust is like having a backup will if you will. It goes into effect and gives your kin the right to make certain decisions and handle your affairs if you’re unable.
You decide who can make which decisions and at what point you will override the living trust.
For example – imagine you owned a business. If you’re in an accident and unable to communicate, who has the legal right to make business decisions? That’s something that would be in your living trust.
If this seems repetitive, that’s because legal processes are overly thorough. There are no assumptions in law. Unless you straight out state what permissions someone has, they won’t get granted them.
4. Durable Power of Attorney
A durable power of attorney is usually the person you appoint to make decisions for you in your health directive, but not always. If you develop some sort of memory or processing issue (like dementia) it’s this person who can speak on your behalf.
That means they have the power to make decisions based on your treatment and your living situation. Most people make this their spouse – but you can have a backup.
If your spouse dies first or is unwilling to act as your durable power of attorney, can appoint two or three backup choices, which will be asked to act, in order.
5. A Legal Documents Guide
While this isn’t a document you need to map out at De Bruin Law Firm. It’s something you want to keep in a very safe place and let your next of kin and decision makers know about. In this binder you should write where they can find the documents listed above, and what to expect.
It should also have a list of bank accounts, passwords, and instructions on how to access anything like a safety deposit box. Some people call this an Oh Sh*t Kit.
Where to Start with Estate Planning
If you can’t afford a lawyer right now or you want a better idea of what estate planning documents look like, you can find templates online. Then, when you’re ready, you can take what you have to an estate planning lawyer and make it official.
It’s macabre, we know, but bite the bullet and do it for the people you’ll eventually leave behind.
Want tips for working with a family lawyer or financial planner? Click here.