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Some Must-Have Documents are Always Needed

Since we’re all going to die (yes, even those of us who are still in our 20s!), we might as well make things easier for the loved ones who, along with grieving our loss, will have to deal with the financial and logistical pieces of our lives.

POSTED ON: June 29, 2022
Probate-Assets-and-Non-Probate-Assets
Probate Assets and Non-Probate Assets

Sad but true—we never know when we’re going to die. Estate planning lawyers who help protect assets for heirs or charities know from previous experience what happens when there’s no plan for their passing. This blunt assessment comes from the aptly titled article “Morbid Money: 8 Things to Do Before You Die” from Millie.

When someone dies without a will, called “dying intestate,” the laws of the state are in charge of your estate assets subject to probate and the people and/or pets who depend on you. The state doesn’t know your dog hates your brother and you wanted your money to go to your life partner and not your parents or siblings. If you and your life partner aren’t married, your partner has no legal right to make any claims on your estate, regardless of your wishes.

Try to think of planning for death not as a morbid chore, but a gift to deliver to loved ones. Here’s what you’ll need to do:

Make an inventory of usernames and passwords used for everything from bank accounts to health insurance portals, streaming services, gym memberships, mobile phones and social media accounts. Someone will need to access this information, cancel subscriptions, and erase accounts.

Make a record of your assets. This includes retirement savings accounts, college savings accounts, life insurance, investments, real estate property, businesses, and any possessions of financial and sentimental value. Include names for your estate planning attorney, financial advisor and CPA.

Make a list of your debts. Like it or not, creditors and debts get paid first from an estate, so your executor will need to know how big or small your debts are. Heirs will also have a more realistic idea of what they may be inheriting.

Are your advanced directives complete and updated? This includes a living will, which tells what medical treatments you do or do not want if you become terminally ill or injured. You’ll also want a power of attorney to name the person who you want to manage your finances, if you are unable.

Have a will prepared by an experienced estate planning attorney. Another expression commonly heard from estate planning attorneys: dying without a will is like driving without a license. Anyone over age 18 should have a will, but less than half of all American adults do. This is the legal document used to direct how you want your assets distributed. If you have minor children, the will names the person you want to raise your minor children.

Check beneficiary designations. Some assets are not included in your will because they pass directly to individually appointed beneficiaries, referred to as designated beneficiaries. Your life insurance policies, pension plan and/or retirement accounts are the most likely to have a designated beneficiary assigned to inherit the asset on your passing. Some banking and investment accounts do as well. Check these to be sure they are up to date. If you opened a 401(k) account with your first job and have married since then, you likely want to update your beneficiary to be your spouse.

Write a letter of intent. This is not a legally enforceable document in most states. However, it can be used to show the court your intent, if anyone questions your will. If you have personal possessions you want to go to certain people, this can be in your will but should also be in your letter of intent. This is also where you share your wishes for the disposition of your body and memorial services, not in your will. By the time your will is found, the “disposition” of your remains may well be completed. Without your written guidance, this can be a burden for loved ones who can only guess about your wishes.

Review your plan every three to five years, and every time a large event in your life occurs. Don’t keep these documents a secret. A trusted person needs to know where these documents can be found so they can act on your behalf when they need to, whether the date is a year or a decade from now.

Reference: Millie (May 17, 2022) “Morbid Money: 8 Things to Do Before You Die”

Suggested Key Terms: Estate Planning Lawyers, Assets, Heirs, Charities, Intestate, Wills, Guardian, 401(k), Beneficiary Designation, Retirement Accounts, Letter of Intent, Estate Planning Attorney, Advanced Directives, Debts, Estate Planning Attorney

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