7 Essential Estate Planning Documents

Author: Michael Hohlt, Portfolio Manager, The Private Bank 02/25/2021

Thorough estate planning is an essential task that many people neglect or fail to address at all. It may seem daunting, but it’s important to ensure your estate plan includes all the essential documents and that your loved ones, or other key individuals such as your attorney, know where to locate them. You should make sure your estate plan includes the following estate planning documents to ensure you’ve prepared adequately:

Last will and testament

A will is a legal document that spells out how you want your affairs handled and assets distributed after you pass away. It generally assigns an executor (usually a spouse or grown child) who will be responsible for following your directions. In your will, you can also name guardianship of any minor children, or share any funeral or memorial plans or requests. In the absence of a last will and testament, a probate court will name an executor for your estate.

Revocable living trust

A revocable living trust is a fiduciary relationship in which a trustor gives a trustee the right to hold title to property or assets for the benefit of a third party. This is different from a will because a trust is activated when you sign it, whereas a will does not go into effect until you pass away. Upon your death, your will goes through probate, and a trust does not.

Beneficiary designations

These documents tend to need your attention earlier in life. For example, when you purchase life insurance or open a retirement account with your employer, you are usually required to name a beneficiary who will inherit the funds when you die. These designations take precedence over instructions in a will.

Durable power of attorney

A durable power of attorney gives a person you choose the power to make decisions about your financial and legal affairs. Assigning this role to a loved one or your attorney does require you to be legally competent to make that choice. This is critical because it allows that person to pay your bills and manage your bank accounts should you become ill and unable to do those tasks yourself.

Healthcare power of attorney

You will also need to have a healthcare power of attorney, in the event you become incapacitated. This is different from a durable power of attorney, which only covers your financial and legal affairs. A healthcare power of attorney allows you to dictate your healthcare preferences, such as a do-not-resuscitate decision.

Digital asset trust

A digital asset trust conveys how to handle your electronic property, including files on your computer hard drive, digital photos, and online accounts such as Facebook, Google, and Twitter.

Letter of intent

Lastly, you should consider writing a letter that accounts for any miscellaneous requests or information that is not covered in your will. For example, you may prefer that your funeral or memorial service be held a specific way.

There is no definitive end to preparation, but obtaining the estate planning documents listed above will facilitate the management of your estate. For more information on how PlainsCapital Bank can help you with your estate planning, please visit the Trust & Estate Services section.

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