7 Must Have Estate Plan Documents & LEO to Keep It All Secure

A GOOD PLAN is like a road map.

It shows the final destination and usually the best way to get there. 

Quote by:  H. Stanley Judd.

If you have children, own a home, or are 35 years of age or older, you should initiate actions to have these Must-Have Estate Documents complete and stored in a safe location to be available to loved ones when required. No matter your level of wealth, the documents listed below are very important to transfer your wealth and to make sure your wishes are executed.

A companion to your estate planning documents is Life Estate Organizer (LEO). LEO should also be on your “must-have” list. In today’s world, with the advent of the digital age and the success achieved by so many, we have an over-abundance of issues to be resolved in the event of death or incapacitation. LEO is a digital lockbox, a private, secure account that helps you document your life and estate and store vital documents to achieve ease of estate settlement. LEO helps you communicate your life information to your loved ones.

Must-Have Estate Documents

  1. Last Will and Testament (LWT)
  2. Revocable Living Trust
  3. Durable Power of Attorney
  4. Healthcare Power of Attorney (HCPA)
  5. Beneficiary Designations
  6. Guardianship Designations
  7. Letter of Intent

Digital Toolbox to Keep It All Safe? You only need one of those and it’s called Life Estate Organizer.

  1. Last Will and Testament (LWT)

Definition

  • A Last Will and Testament is a legally enforceable declaration of how a person wants their property and assets distributed after their death.
  • It is The Primary Estate Planning Document used to ensure your estate issues are resolved as designated by the deceased.

Why you should have one

  • No matter what your economic status, everyone should have an LWT.
  • An LWT ensures your property is distributed as you wish it to be.
  • An LWT gives permission to friends, family members, advisors, or attorney(s) to carry out your wishes if you die or become incapacitated.
  • It names an executor to oversee estate settlement and the distribution of assets.
  • It establishes guardianship for surviving dependents and accounts for special circumstances.
  • The probate court uses an LWT to manage the process of settling an estate.
  • It makes the estate settlement process for heirs much easier.
  • It helps to keep PEACE in the family.

What happens if you do not have an LWT?

  • If you die intestate (without an LWT), your estate is settled by the courts and if you have minor children, the courts will appoint a guardian for your minor children.
  • In the absence of an LWT, a probate court would make decisions on how your property should be distributed.
  • Keeps the government from distributing your property or from becoming state property.
  • It is possible your estate would not be settled to your satisfaction and without consideration of your family’s circumstances.
  • It could cause dissatisfied family members and friends to fight over your estate.
  • It could encounter lengthy and potentially embarrassing court proceedings.

  1. Revocable Living Trust

Definition

  • An Estate Planning Tool used to determine who will get your property when you die. It is revocable meaning you can change the trust as your circumstances or wishes change. It is considered living because it is made while you were still alive.
  • It provides a mechanism to ensure the continued management and preservation of your assets.

Why you should have one

  • It ensures your property remains available to be used for your benefit if you become incapable of managing your own affairs.
  • Allows for continuity in the management of your affairs if you are disabled.
  • Since it is revocable, it is flexible and changeable.
  • Your assets are available immediately after death to settle your estate.
  • The transfer of property is simplified at death.
  • Provides for uninterrupted investment management.
  • Helps your estate avoid the costs and hassles of probate.

What happens if you do not have a Revocable Living Trust?

  • Your estate could be settled in probate court by the government.
  • It’s quite possible your estate might not be settled to your satisfaction.
  • Your heirs could incur a tax burden.
  • It could cause dissatisfied family members and friends to fight over your estate.

  1. Durable Power of Attorney (POA)

Definition

  • A Durable Power of Attorney allows a legally competent person to choose someone to act on their behalf, financially and legally, in the event they cannot make decisions.

Why you should have one

  • POA gives your appointed agent the power to transact business on your behalf and make other legal decisions given your inability to do so as if they were you.
  • Because it is revocable by the principal at any time typically when the principal is deemed physically/mentally competent or upon death.
  • You might consider having more than one person with Durable Power of Attorney to transact different business disciplines such as financial, investments, real estate, etc.
  • You get to select who you want to have these powers.

What happens if you do not have a Durable Power of Attorney?

  • Your assets could be mismanaged while you are incapacitated.
  • You could suffer financial losses due to no management of your assets.
  • A court may be left to decide what happens to your assets.
  • A court decision regarding your assets may not be in your best interest.

  1. Healthcare Power of Attorney (HCPA)

Definition

  • HCPA is a legal document that empowers a specific individual to speak with others and make decisions on your behalf concerning your medical condition, treatment, and care. Similar but different documents are: Advanced Directive, Living Will, Living Will Form, Advanced Healthcare Directive, Advance Medical Directive, Advanced Decision Form.

Why you should have one

  • Gives you control over your medical wishes.
  • You should have a trustworthy person making life and death decisions for you as if they were you.
  • Helps people who cannot communicate to exert their wishes through their appointed Healthcare Proxy (person’s agent).
  • You should consider having more than one in the event the first named is not available.
  • You may become too ill to communicate your wishes about your medical care.

What happens if you do not have a Healthcare Power of Attorney?

  • You are leaving your health care in the hands of family members, or others you do not know or possibly trust.
  • Doctors, Nurses, Emergency Medical Technician (EMT) or other emergency health care providers may perform a procedure or administer a life-saving service which you may not want.

  1. Beneficiary Designations

Definition

  • A person designated by a benefactor as the recipient of an insurance policy, will, trust, financial account or other assets in the event of the benefactor’s death.
  • Types of Beneficiaries
    • Irrevocable beneficiary – a beneficiary who cannot be easily changed.
    • Revocable beneficiary – a beneficiary who can be changed.
    • Primary beneficiary – a beneficiary who is first in line to be the recipient.
    • Contingent Beneficiary – a beneficiary who will receive the benefits if the primary beneficiary passes away before the benefactor.
    • Minor Children as beneficiaries – a minor child who is a beneficiary must have an appointed trustee to manage the proceeds on behalf of the minor.
  • Beneficiaries should be a minimum of 21 years of age and mentally competent. If not, a court may become involved.

Why you should have them

  • This document provides a seamless transition of proceeds to the beneficiaries.
  • Possessions can pass to heirs without being dictated in an LWT.

What happens if you do not have Beneficiary Designations?

  • If you do not designate beneficiaries a judge will make decisions on your behalf whereby the judge’s decision may be different from what you would have done.
  • If you do not designate beneficiaries or if your beneficiary dies or is unable to serve, a court would be left to decide the distribution of your funds.

  1. Guardianship Designations

Definition

  • A Guardianship Designation appoints guardianship of a minor child to an individual or individuals, avoiding the involvement of child services and the courts in the determination of who will oversee the care and protection of your minor child in the event of your death or incapacitation.

Why should you have one

  • It’s very important and often overlooked, but anything could happen to you.
  • You need to plan for your children in the event of your death or incapacitation.
  • You want to make this decision prior to death rather than someone making the decision for you.

What happens if you do not have Guardianship Designations?

  • Court could rule your minor child should live with a family member you would not approve.
  • Child could become a ward of the state.
  • Your child could be placed with someone who does not share your point of view, might not be financially sound or willing to raise your children in the manner you would.

  1. Letter of Intent

Definition

  • A document created by the deceased while still alive, leaving instructions to the executor or beneficiaries defining what the deceased would like to have accomplished with certain assets or other estate issues.

Why should you have one

  • To carry out specific instructions that were important to the deceased.
  • To provide information to a probate judge of the deceased’s intentions especially if there is not an LWT.
  • It could help in the distribution of assets if the deceased’s LWT was deemed invalid.

What happens if you do not have a Letter of Intent

  • No special instructions will be carried out.
  • If an LWT was deemed invalid, the court would have no clue of the deceased’s intentions.
  • It’s a lost opportunity to communicate instructions to loved ones.

Life Estate Organizer (LEO)

Definition

  • A recent addition to the list of “must-haves”.
  • LEO is an online digital planning tool.
  • It compliments a Last Will and Testament.
  • LEO prompts you to document your life and estate information.
  • It allows you to capture a very broad range of issues not normally covered anywhere else.
  • Acts as a repository for important documents, photos, pet care, family memories, etc.
  • Provides secure data storage.

Why you should have one

  • After you have completed your LWT and other documents, you are very happy to be done with the task. Then you are told to organize your important documents and personal items. Your first thought is “What are you talking about?” Then your attorney or advisor explains, and you ask, “Is there a tool to help me with this process?” Generally, they will say “No, you can organize this as you see fit.”
  • You should have your own LEO because elements of your life should be known to future generations as it relates to your health, your experiences, and your successes.
  • In today’s world, we have so much more to account for in the way of assets, liabilities, digital assets, etc. See Our Getting Started Checklist to help you prioritize and keep track of your progress.
  • The time has passed for having your life and estate information in a folder in your desk drawer.

What happens if you do not have a Life Estate Organizer account?

  • You will forget to include a number of important life and estate issues.
  • You will have an incomplete estate plan.
  • Your executor and loved ones will have to work harder to uncover all the things that make up your estate.
  • Settling your estate will likely be more difficult and take much longer to resolve.
  • It may require a search of multiple locations in your home(s) to find and compile all of your estate information (desk, file cabinets, computer, disk drives, etc.).
  • It is inconceivable you would leave your life and estate information unorganized for your loved ones and expect them to solve the problem without your help.

How to Create these Must-Have Documents

  • Subscribe to Life Estate Organizer (LEO) and try it FREE for 30 days.
  • Consult with an Estate Attorney or Financial Advisor.
  • Do It Yourself (DIY).
  • Do It Yourself (DIY) with the help of online services such as LegalZoom.

Conclusions

  • Death is inevitable! Be prepared! Start Now!
  • You can create your life and estate plan with help from the services listed above.
  • Review our Getting Started Checklist for knowledge of what is involved.
  • Loved ones benefit from having the above MUST HAVE DOCUMENTS.
  • There is SO MUCH MORE to creating an Estate Plan than divvying up of assets.
  • An LWT is a great place to start, but it is just the beginning.
  • If you have children and die intestate (without an LWT) the courts will appoint guardians for your minor children. Why wait? It is that important! Do It Now!
  • You can control what happens with your estate if you are incapacitated or die by having the MUST HAVE DOCUMENTS.

Sign up for a LEO subscription today! It’s FREE for 30 days so you can try it out and then enjoy 20% an annual subscription with our #Staycation Discount! Only $4 per month or $48 for 12 months. Offer expires August 31, 2020.