As we ring in another new year, think about making one more resolution that can go a long way toward making your life and the lives of those you love easier. By preparing an estate plan and organizing your personal legal documents now, you can ensure that you and your family members are protected in an emergency.
Start by Organizing Your Papers
The thought of getting your legal affairs in order may seem overwhelming. However, gathering your “important” papers and putting them in one place is an excellent place to start.
Important papers include various documents such as birth certificates, marriage licenses, divorce records, adoption papers, passports, military records, wills, powers of attorney, and living wills. Also, don’t forget financial and investment records, including 401(k)s, IRAs, pensions, annuities, life insurance policies, bank accounts, real estate, and stock investments. Lastly, you should include documents related to liabilities such as mortgages, debts, and credit cards.
Ensure that your life insurance policies and financial accounts are up to date and that the correct beneficiaries have been named. We recommend that you keep your important documents in a fireproof home safe, but if you keep them in a safe deposit box at a local bank, make sure you store copies at home.
Tell someone you trust where you keep your important papers and how to access any online accounts or files, or leave instructions for them in a secret location that only they know. You can also ask a lawyer to assist you.
Do You Have These Legal Documents?
As you get older, different estate planning documents can help you plan how future decisions related to your personal care and assets will be handled. For example, wills and trusts allow you to name the person(s) you want to have your money and property, and who will manage your estate, after you die. Durable powers of attorney for health care let you specify who you want to make ordinary medical decisions if you are too ill to make them yourself. Advanced directives (living wills) let you make end of life health care arrangements, and allow you to specify the medical care you want – or don’t want – if you become too ill to communicate your wishes. These documents help ease the burden of family members at a sad and stressful time.
For other legal and financial matters, you can give a person you trust the power to act as your Agent under a financial power of attorney, who can then make decisions about such matters when you are incapacitated and unable to do so.
An experienced estate planning lawyer can explain these legal documents in more detail and help you decide which ones are right for you.
Get a Legal Document ‘Checkup’ Every Year
Even if your legal papers are organized, it is a good idea to perform a “checkup” once a year. As the years tick on, things change. For example, if your family has added new children or grandchildren, you might want to add them as beneficiaries to a will or trust. And what about the persons named as your executors, trustees, or Agents under your powers of attorney? Are they still the best people for these roles?
Similarly, are the people you named in other legal documents still the most appropriate choice?
Depending on your age and health status, you may want to provide a copy of a healthcare power of attorney or advanced directive to your healthcare providers for their records.
Please keep in mind that these are general guidelines. An experienced estate planning attorney can review your specific situation with you, and help you devise a plan tailored for you and your family.