6 Documents You Need for Effective Estate Planning 

6 Documents You Need for Effective Estate Planning 

Thursday, 25 July 2019 16:16

There is incredible peace of mind that comes with “getting your affairs in order.” You work hard to provide for your family and loved ones; and with estate planning, you can continue to do so when you are gone. Many people are intimidated by the idea of estate planning - and many others assume it’s just a matter of drawing up a will. As usual, the truth is somewhere in the middle. Thorough estate planning is more extensive, and you do need additional documents - but it is also very manageable. 

Start by knowing what types of documents you should include in your estate plan:


1) Information Memo

Keep a file of essential information, including:

  • Insurance policies
  • Brokerage accounts
  • Bank accounts
  • Outstanding debt
  • Credit card accounts
  • Tax documents 
  • Names/phone numbers of your professional advisors, accountants, attorneys, etc.

Your life changes - it’s inevitable! Review this file and make sure it is updated with current information as needed.

2) Your Will

A will is essentially a blueprint of your wishes and intentions. This written document enables you to appoint an executor to distribute your assets, bequeath assets to your heirs, and, if applicable, designate a guardian for your minor children. 

Without a will, your estate will be placed in probate, and a court will make decisions regarding your assets. Often, this is a protracted and stressful process for your survivors. A will helps safeguard your wishes and streamline the settling of your estate.

3) Durable Power of Attorney for Finances

Here, you can designate an advisor or individual to make financial decisions for you if you are incapacitated (i.e. you are unable to make or communicate responsible decisions because of mental deficiency, mental illness, physical illness, disability, etc.). 

Your designee will make financial decisions on your behalf and can be given access to your bank and investment accounts to pay your bills, taxes, and medical expenses, as well as manage your real estate assets, invest on your behalf, etc. They must act in your best interests.

A durable power of attorney is valid when you are incapacitated and after, if you recover. It automatically expires upon death.

4) Medical Directives

In this document, you name someone to make healthcare decisions on your behalf if you are unable to do so yourself. The directive outlines your wishes and preferences in terms of treatment and intervention. 

For example, you may wish to sign a DNR or do-not-resuscitate order. If you stop breathing or your heart stops pumping, your physician will not attempt CPR or take extensive measures. When you are unable to make your own healthcare decisions, your proxy will do so based on your stated wishes. These directives should be part of your medical records. 

5) Funeral Instructions

In your funeral instructions, you include details of what type of arrangements you would like made after your death. For example, you may want to explain your wishes regarding a service, cremation, etc. Also include a list of relatives, loved ones, and business associates that you want notified of your passing.

It may be helpful to preplan some or all aspects of your funeral (e.g. purchasing a cemetery plot) to take this task off your survivors’ shoulders and/or to ensure your wishes are met.

6) Taxes

Your estate is likely subject to both state and federal taxes. You can take steps to minimize this burden. Faw & Associates can examine your specific situation and include provisions in your estate plan to lower estate taxes, ensuring more of your assets are distributed to your beneficiaries. 

Estate planning can be complex, particularly when you have personal and business issues to iron out. But when you have the right advisors on your side, it is not only manageable - it is a source of tremendous stress relief. You know your wishes will be honored and that your loved ones are provided for after you are gone. Faw & Associates is here to assist you with the process. Contact our team to start planning effectively and proactively.