In fact, a RocketLawyer.com survey last year found that over 50% of Americans do not have a last will and testament.
Even more troubling is the survey found that over 40% of Baby Boomers age 55 to 64 years-old do not have a will. This is the group that probably needs it more than any other.
Many people think they simply do not have enough assets to bequeath to someone, estate planning costs too much money, or they simply do not want to think about the end of their lives.
This is a travesty and something that is easy to fix.
However, a will is not the only estate planning document you need. Here is an essential estate planning checklist of the basic four tools you need to ensure your wishes are carried out and your family’s best interests are protected if you die or become disabled.
1. Last Will And Testament
Most people know and understand the role of a last will, or at least they think they do, but that doesn’t stop a majority of Americans from not having a will. A last will and testament is the cornerstone and most critical piece of a person’s estate plan. And, it is more than instructions on who gets your worldly possessions.
Everyone needs a will to ensure their possessions and assets are distributed as effectively and efficiently as possible with the least amount of fees that have to be paid by your heirs or estate.
Even if you think you don’t need a will, you probably do. Do you own a car? Do you have children from a first marriage? Are you sure your last wishes will be carried out? Do you want to be buried or cremated?
A will is the only way to give you the best shot of your wishes being followed, especially if you haven’t had these difficult conversations.
The Danger Of Not Having A Will
If you die without a will, you are leaving it up to the state where you reside to determine who will get your property when you die. Even worse, you are leaving it up to other people to decide who will be the guardian of your children.
Also, having your estate go into probate court to decide the outcome is costly and time consuming. Some figures estimate that almost a third of your assets could be gobbled up by lawyers and fees if you do die without a will and your estate has to be settled in probate court.
Writing Your Own Will
While most people should hire a lawyer to help them draft a will, you can write a last will and testament yourself. You can even write a will for free. Technically, in most states, all you need is a computer, paper, a notary, and witnesses to write your own will.
There are several websites like RocketLawyer.com and LegalZoom where you can download the template forms to get started. Creating your own will is a very simple process.
Of course, you should seriously consider hiring a lawyer for unique family situations, like if you have a large amount of assets or a host of other potentially tricky issues. Writing your own will can also lead to your family and loved ones challenging its validity in probate court as well, so tread lightly.
2. A Living Will
The next item on your estate planning checklist should be a living will. No one thinks they will become disabled in their lifetime. No one thinks they will need their loved ones to make the tough choices at the hospital, such as how long to stay on a respirator.
A living will can help take the guess work and the guilt out of your loved ones hands. It spells out exactly what life sustaining medical treatment you want to take place should you become incapacitated.
A living will is your written instructions on the type of life sustaining medical treatment you desire and the length of time you want it. It instructs your loved ones and your doctors with your wishes even if you are not able to communicate or unconscious.
For example, you can request in your living will that a feeding tube be withheld if you are terminally ill. Or, you can specify in a living will exactly how long you are kept alive on life support.
3. Medical Durable Power Of Attorney
Another item on your estate planning checklist needs to be a medical durable power of attorney which is also sometimes called a health care proxy or health care power of attorney. A medical durable power of attorney authorizes a loved one or someone else you designate to make the medical decisions for you in case you can’t.
A medical durable power of attorney goes hand in hand with a living will. This document allows a person to make all medical decisions on your behalf from the routine decisions about procedures, medications, and other treatments that might not be specifically stated in your living will to even the most difficult decisions such as stopping life support.
Deciding on the representative to give medical power of attorney to isn’t a choice that should be taken lightly.
4. General Power Of Attorney
A power of attorney allows you to designate a person to represent you. While a general power of attorney has the same power in most instances as you would if you were physically present, you can also scope specific or specified powers of attorney for certain situations as well.
A general power of attorney will allow the representative (e.g., a parent, spouse, or an adult child) to be able to act in your name you should you become sick, disabled, incapacitated, or unable to manage your own financial and personal affairs.
A power of attorney is a large amount of power and should only be designated to a trusted person. For example, your representative who has your power of attorney has the authority to enter into contracts in your name, borrow money, and make major financial decisions for you.
A power of attorney allows your spouse or family to make fast and efficient decisions in your name without the delay of seeking court approval to conduct your financial and personal business transactions.
Estate Planning Checklist Honorable Mention: The Trust
A trust is one of the greatest and most creative estate planning tools created to transfer property and preservation family assets. There are many different types of trusts, and they are no longer simply for the rich and famous and their spoiled children.
Trusts have started to creep into main stream financial planning and the estate planning checklist of more Americans.
Using a trust in your estate plan has many benefits. Trusts allow you to put conditions on how and when your assets are distributed after you die, and you can make these decisions well in advance of your death. They also help you reduce estate and gift taxes.
This is especially beneficial when you need to distribute assets to heirs efficiently without a high cost, delay, and or the publicity of probate court. Trusts also help you to protect your assets from creditors and lawsuits.
Everyone Needs To Have A Will
If you take nothing else away from this estate planning checklist, you should go out at get a last will and testament today. It is the most important tool in this estate planning checklist. It is an urban myth to think you do not have enough assets to warrant having a will.
Do you want your state to determine who will receive your property when you die? It isn’t always as cut and dry as you think it might be. Your property and assets may not automatically go to who you think is your next of kin.
Having a will also lets you name an executor, which is also called a “personal representative” in many states. You can also waive the requirement for your executor to have to post a surety bond by listing it in your will. A last will is on the estate planning checklist because it also lets you determine who your children’s guardians will be after you die.
No one wants to think about their death, but it is a necessary evil. Do not leave your grieving relatives with more headaches and sorrow. Ensure that your final wishes are carried out by having these essential documents in the estate planning checklist before you need them.
Note: Please remember that I am not a lawyer, and nothing listed here should be considered real legal advice. You should seek the counsel of a competent lawyer in your area to help you complete your estate planning.
Do you have a will? What’s keeping you from getting a will? Have you known someone whose family has had an issue because a loved one has died without having a will or an estate plan?