Estate Planning: What Documents Do I Need?

For many of us retirement is a word that evokes relaxation, travel, frequent visits with family and friends, and an end to financial worries -- a kind of heaven on earth. Nonetheless, it is important to remember that a joyful retirement requires preparation with a competent and realistic estate planning attorney. There are long-term decisions to be made regarding asset protection, wealth distribution, and (the one no one likes to think about) planning for incapacity or death of yourself or your spouse. Without estate planning, retirement is a risk you may not be able to take.

Updating Estate Planning Documents Is Essential
In order to make your retirement as worry-free as possible, it is critical that you have all needed personal documents drawn up and executed by your estate planning attorney. Because life is so unpredictable, once you are a responsible adult it is never too early to take this step. Keeping your documents current and appropriately detailed will help you to roll smoothly through your well-deserved retirement years.

Necessary Estate Planning Documents
Sharp estate planning attorneys generally agree that the following are necessary documents for all of their clients, regardless of their levels of accumulated wealth:

Wills and Trusts
A carefully worded will is a necessary document because it names your beneficiaries. Once executed, your will is legally valid and you can rest assured that your wishes will be followed. Other aspects of your will are to [1] name a personal guardian for your children [2] name a personal representative (executor) to carry out the terms of your will [3] name a trusted individual to manage property left to your minor children and [4] make your wishes regarding your funeral or memorial known.

Trusts are extremely helpful in avoiding unnecessary taxation, both state and federal, and in protecting your assets for the future. Your knowledgeable estate planning attorney strategize precisely how to set up trusts that will be most beneficial in your particular circumstances.

Durable Power of Attorney
It is impossible to predict whether or not you will become incapacitated, temporarily or permanently, during your lifetime. You may develop an illness or be seriously injured in an accident, becoming gradually or suddenly unable to manage your financial affairs. A durable power of attorney (POA) permits you to designate a person of your choice to make legal and financial decisions on your behalf. If you do not have a POA in place at the time you become mentally incompetent (e.g. in a coma, undergoing surgery) the court will decide how your assets are handled. There is no downside to having a POA since, if your incapacity is temporary, you can revoke the document as soon as you return to health.

Healthcare Power of Attorney
A healthcare power of attorney (HCPA) is similar to a POA except that the HCPA names the individual you want to make healthcare decisions for you in case you become incapacitated. The person named, usually a spouse or other close family member, is tasked with making weighty, possibly life or death medical decisions concerning your care.

Beneficiary Designations
While your will names beneficiaries for your accumulated property, you may have several possessions not covered by the will, such as a 401(k) or an insurance policy. This is why it is necessary to assign a beneficiary, and a contingent beneficiary, for such investments. You should be aware that beneficiaries must be over the age of 21 and mentally competent for your designation to be legally enforceable.

Letter of Intent
A letter of intent is a document left in the hands of your executor or your primary beneficiary, instructing that individual about what you want done with your assets in case you become incapacitated or die. It may also give details about your desires relative to your funeral or memorial. Your letter of intent adds another layer of protection by explaining your wishes to the court in case your will is, for some reason, invalidated.

Guardianship Designations
Guardianship designations are only necessary if the will or trusts you have in place do not have guardianship clauses.

A Relaxing Retirement Requires Peace of Mind
If you want to have the retirement of your dreams, make sure to plan ahead. While you may want to avoid thinking about aging and mortality (most of us do), taking the time to have the above documents properly prepared will protect your family, preserve your wealth, and allow you to enjoy contemplating retirement.


This informational piece was provided by Tripp Wiles, an attorney specializing in estate planning and asset protection.  Satisfying Retirement received no compensation for this post. Consult an attorney for applicable regulations and laws in your locale.