Estate Planning: 11 Documents You Need for Coronavirus and Always
Estate planning lawyers are reporting a significant rise in calls from new and existing clients wanting to make sure that their estate plans are complete and up to date. Estate plans are critical for anyone and everyone to have — no matter your net worth.
If a similar thought has crossed your mind, below are the 11 documents you need.
But first, a few tips for getting things done in the upcoming months of social distancing and isolation.
How to Complete (or Update) Estate Plans in the Age of Coronavirus
So, things are not business as usual right now. However, it may be possible for you to create or make changes to your estate planning documents despite social distancing recommendations.
Here are a few recommendations and resources for completing and updating estate plans over the next few months:
Do it Yourself
Believe it or not, some of these documents you can write your own. You can even write your own will. Just put your thoughts down on paper. However, this is not the most reliable means of making sure your assets are distributed properly.
Use an Online Service
There are quite a few trusted online services to guide you through the will making process. Here are a few of the most respected free and paid options. Some offerings include some limited support from an attorney:
Lawyers are ostensibly the most personalized way to create estate plans. And you probably need a lawyer if you have a relatively high net worth or a variety of different types of assets.
If you need a lawyer, it may be possible to get a face to face meeting, but it is more likely that you will meet online or exchange documents via email.
While it may be best to ask friends and family or another trusted advisor for a referral to a vetted lawyer, you can search for an accredited estate planner on these resources:
- National Association of Estate Planners & Councils
- National Academy of Elder Law Attorneys
- Martindale offers the richest database of legal professionals and you can search by specialty
- Your state’s bar association
TIP: When talking to the lawyer, be sure to ask them about their ability to do esignatures with services like docusign and online meetings via zoom or another video conferencing service.
The trickier part of finalizing estate plans is getting the necessary signatures from witnesses and notaries. In many states, all relevant parties must sign the documents in the same room in order for them to be legally valid.
The good news is that many states are temporarily allowing Remote Online Notarization (RON) due to shelter in place orders related to the Coronavirus.
- You can learn about the rules in your state, and how they might be changing, at the National Notary Association.
Unless otherwise noted, most estate planning documents can be created on your own or with the help of an online service or attorney.
Okay let’s face it, when you die you are not going to be there to tell everyone where everything is. And, helping your loved ones figure out what you left behind is really important.
There are a few web sites that help you organize your thoughts and will store all of your important documents in one place so that all of your instructions are available.
These are two of the most well known document repositories:
NOTE: NewRetirement is considering offering a complete service for estate planning needs. Please email us if you think that would be useful to you and let us know what you most want to see in the offering.
11 Documents to Consider for a Complete Estate Plan
Estate Planning is a term broadly used to describe a variety of end of life planning issues.
The term estate refers to the whole of your assets and debts – your house, accounts, possessions, obligations, everything (not just your home), and a thorough and reliable estate will include much more than a will.
1. Will, the Anchor of Your Estate Plan
A will, or a last will and testament, is a legal declaration by which a person names one or more persons to manage his or her estate and provides for the distribution of property at death.
“Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you’re ever incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?”
If you have minor children, your will should also specify who will be their guardian upon your death.
2. Guardianship Designations
If you have minor children, you need to name a guardian — someone to raise them when you are gone. A backup or contingent guardian should be named as well. Sometimes these designations are part of your will and/or trust.
You may also want to consider guardianship for pets.
3. Living Trust
In general, the legal meaning of a trust is when property is given to a trustee for the benefit of a third person or persons. In many cases, the person setting up the Trust (the Grantor or Trustor) is also the person who maintains the trust (the Trustee) during their lifetime as long as they remain competent. Trusts are most often used in Estate Planning as a way to avoid taxes and probate.
However, a trust can sometimes be expensive to create and administer and there can be negative consequences of putting assets into a trust if – for example – you later require those funds for long term care or other unforeseen circumstances.
A trust should probably be created with the help of a lawyer.
There are two main types of trusts related to estate planning:
Irrevocable Living Trusts: An Irrevocable Living Trust is a trust in which the creator has permanently given up control of the assets to the trustee whereby the creator no longer has the legal right to control the assets in the future. Irrevocable Living Trusts might be used to:
- Reduce estate taxes
- Protect assets from creditors
- Gain tax efficiencies by distributing assets into a charitable trust.
Revocable Living Trusts: A Revocable Living Trust enables the creator to maintain control over or take back their assets that are in the trust. You might consider a Revocable Living Trust if you wish:
- Privacy with regards to your estate
- To avoid probate
4. Financial Power of Attorney
Perhaps more important to your well being than a will or trust is the designation of a Financial Power of Attorney. A Financial Power of Attorney will make designated financial decisions on your behalf if you are unable to do so while still alive.
It is important to remember that aging is a process whereby a large percentage of people loose cognitive or physical functions that impair their ability to make or act on necessary decisions. Your designated Financial Power of Attorney can be given the authority to do any legal act you might do yourself. You can give your agent access to bank accounts, stock accounts and responsibility for managing real estate or other assets. It may be prudent to enable them to file income tax returns or apply for benefits on your behalf and more.
Family members, friends, advisors, lawyers or others can have your Power of Attorney.
Having a Power of Attorney can give you peace of mind that your affairs will be managed according to your wishes, and it can save your family a potentially expensive and time-consuming court action to appoint a guardian or conservator if you are suddenly incapacitated.
5. Health Care Proxy / Medical Power of Attorney
Powers of Attorney generally refers to an ability you have to legally designate a person to act on your behalf in case you can not make decisions for yourself.
A Medical Power of Attorney is an authorization of a designated person to make health care decisions on your behalf. It enables you to specify someone to work with your health care provider to give you the care you would like to receive.
Without a Medical Power of Attorney, your health care decisions are exclusively in the hands of your health care providers when you are not able to make decisions yourself.
6. Living Will or Advance Directives
A Living Will, also called an Advance Directive, is a legal document that outlines specific instructions for your medical treatment if you can not make those decisions yourself. It often specifies whether or not you would like to use life sustaining medical devices, feeding by tubes and sometimes specifies the use of pain medications.
In addition to lawyers, Nolo, Rocketlawyer and Legalzoom, there are some free or low cost resources for creating an advance directive:
- Caringinfo.org: You can download and print for free state specific forms. Or you can call 800-658-8898 and they will mail them to you and answer any questions you may have.
- Five Wishes from Aging with Dignity: Legal in 42 states, Five Wishes is a simple do it yourself document that covers all facets of an advance directive.
- Your own doctor’s office, hospital or insurer may have resources for helping you with an advance directive.
7. Beneficiary Designations
“Beneficiary Designation” refers to the persons you have specified as being the beneficiaries on 401ks, life insurance policies and other accounts.
It is very important that you keep these designations up to date as they can supersede what you may have written in your will or trust.
8. Life Insurance
Life Insurance can be a major part of your Estate. There are also various Estate Planning strategies you can employ using Life Insurance. You may wish to consult with an insurer about a policy that would be applicable to your particular situation.
If you already have a Life Insurance policy, make sure that your beneficiary designations are up to date.
9. Letter of Intent/Letter of Instruction
This is not necessarily a legal document. A letter of instruction is a formal declaration of any beliefs or ideas you have for your funeral should be expressed and documented. If you have arranged for your own burial or cremation, be sure to provide details and contact information on your preparations.
Feel free to also specify whatever details that are important to you: who you would like to officiate, what songs should be played, specify a charity to receive donations in your honor and more.
Don’t forget to specify daily routines that need to be maintained.
It would also be considerate to include a list of people you would like to be notified.
Furthermore, you can help mitigate the potential for family quarrels by specifying a process for disseminating your things – you might let your eldest choose something first and then go on through the family for example. Or, you can name individual objects for particular people.
10. Digital Asset Instructions
Digital assets that might have a financial value like your paypal aaccount, should be included in your will. However, you probably have a lot of accounts that are not worth anything, that will need to be taken care of if you die or are incapacitated.
You will probably want to pass on usernames and passwords for most, if not all, of your digital life:
- Social media
- Domains or blogs you own
- Online subscriptions
- And more
11. List of All Accounts and Documents
It will be extremely useful to your family or estate administrator to have a complete list of all of your accounts (and passwords when applicable). Think about your pension plans, bank accounts, brokerage accounts, loans, mortgages, titles, retirement plans, insurance policies, utilities and more.
They will also need contact information for attorneys, financial planners, tax preparers, stock brokers or other agents.
The location of other official papers like Social Security cards, marriage certificates, birth certificates, etc. would also be useful.
Consider Sharing Your Plans with Family Members Now
In general, include as much detail in your plans as possible and consider sharing them with family members in advance of any illness or death.
Here are a few tips for discussing sensitive financial and end of life matters with loved ones.