Nobody lives forever. We all know this, but it can sometimes be hard to imagine a time when you will pass away, or be unable to advocate for yourself. Luckily, there are several documents you can complete now that will make things easier on you and your loved ones, no matter what happens in the future.
The process of completing these documents is called estate planning , and it allows you to ensure that your property will be transferred to your friends and family in an orderly and cost-effective manner. You can select beneficiaries to receive your money or possessions, appoint guardians for your children and pets, and specify an agent and executor who will make sure your wishes are carried out. This gets more complicated the more assets you have—especially where there is property involved.
Your will is going to be unique to your circumstances. If you’re married, you’ll want to guarantee that your spouse will be taken care of in the event of your death. Have kids? In addition to specifying guardianship, you’ll want to have them listed as beneficiaries. If you’re one half of an LGBTQ couple, especially with children, you’ll need to take special care to make sure your will is airtight in order to protect your family.
You can begin planning your estate today. Tomorrow makes the process quick and simple, and many of the important documents are available for free on our app. Before you start the estate planning process, read on to learn about important documents such as:
- Living will
- Durable power of attorney
- Last will and testament
- Letter of intent
- Pour-over will & revocable living trust
- Life insurance policy
What’s the Deal with a Living Will?
Say your health declines and you’re unable to make decisions for yourself. Your family and friends want to honor your wishes…but in order to do that, they need to know what your wishes are.
That’s where a living will comes in. It details everything from whether you want to be kept on long-term life support to if you’re comfortable donating your organs. You can also include a Do Not Resuscitate (DNR) order, Do Not Intubate (DNI) order, or specific instructions regarding various medical treatments.
While it can be uncomfortable to think about these things, doing so while you’re healthy gives you a voice when you’re incapacitated. It also makes things easier on the people you love, who will have tough choices to make regarding your healthcare if you haven’t completed a living will.
Why do You Need a Durable Power of Attorney?
If you are ever incapacitated, your loved ones will need to make more than just medical decisions. They will also be asked about your finances, property, children, and pets. A durable power of attorney allows you to appoint an agent who has the legal right to make these choices on your behalf, and ensure that your wishes are carried out.
By choosing someone to be your agent, you’re giving them the power to manage your money, pay bills, file tax returns, buy or modify insurance policies, appoint guardianship, and designate someone to care for your pets—among other things.
It’s important to pick someone you trust, and to discuss your wishes with them. Make sure they’re willing to take on this task, and capable of doing so.
How is a Last Will and Testament Different from a Living Will?
We’ve already talked about your living will…so why are we suggesting you create a last will and testament? It’s actually a completely different document, and just as important as the living will.
Your last will and testament designates what happens to your money, possessions, children, and pets after your death. These matters can get tricky, and the court will be involved. Having your instructions outlined in this document makes things easier for everyone involved, and grants you peace of mind.
While you’re creating your last will and testament, you’ll have to appoint an executor. This is a person who is in charge of making sure all of your wishes are carried out after your death. They will need to admit your will to probate court, locate and distribute your assets, pay off your debts, track down your beneficiaries, and file your final tax return.
The probate process can be lengthy and complicated, and it is different in each state. Your executor will have to go to court (if you don’t have a will, the court will appoint someone to do this task). Your property must be inventoried and appraised, and then used to pay off any debt you still have. After that, your executor will pay your taxes. Once that is done, your beneficiaries can inherit whatever is left. The probate process involves court, legal, and administrative fees, which can add up quickly.
What’s the Point of a Letter of Intent?
Unlike the other documents we’ve gone over so far, a letter of intent is not a legally binding document. In fact, it can be as simple as a handwritten letter. Its purpose is to help your loved ones carry out your wishes and settle your affairs after your death. This is the best place to keep track of important passwords, banking information, passport and license numbers, details about accessing documents and safe deposit boxes, and any personal messages you want family and friends to receive.
When combined with legal documents, your letter of intent will simplify the process of caring for you in the event you are incapacitated, or settling your affairs after you pass.
Do you need to complete a medical consent for your child(ren)?
Let’s say your child gets hurt, and you are unable to be there. Who makes decisions about their treatment? Medical care for a minor can be legally tricky, especially if their parent isn’t there to give consent in person. That’s where a medical consent form comes into play. You can create one in the Tomorrow app in just a few minutes, and appoint someone to make those important decisions in your absence. Add the guardians of your choice, plus include information about your child’s medications and allergies, and you’re all set.
How do Pour-over Wills and Revocable Living Trusts Work?
The next two documents go together. A pour-over will is a type of last will and testament, but its specific function is to transfer your property into a revocable living trust after you die.
Your revocable living trust can, as the name suggests, be altered or revoked during your lifetime. While you’re alive, you can put funds into this trust, knowing that its contents will be distributed according to your wishes upon your death.
Why Bother with Life Insurance?
So, you’ve completed all of these documents. Your wishes have been recorded and you’ve contacted someone you trust, asking them to act as your agent and executor. You’re ready for anything, right?
Not quite. Many people don’t realize that debt sticks around even after you die, the burden shifting from you to your family. Burial and funeral expenses add up as well. And then there’s the fact that your family will lose your income. This could impact their ability to afford:
- Day-to-day expenses
- Medical expenses
- Education costs for your kids
- Weddings for your kids
How can you guarantee that your family will stay afloat when you pass away? The answer is simple: take out a life insurance policy.
This may sound like a daunting task, but it’s actually quite simple. The younger you buy, the cheaper it is, and many companies allow you to lock in your rate for future years. There’s a possibility that you will be asked to submit to a medical exam, which will determine your policy’s rate. You only have to do this once, so if you take the exam while you’re healthy, you’re going to save yourself a lot of money over the years.
Even if your employer provides life insurance, you should still take out your own separate policy. Employer-sponsored life insurance generally has inadequate coverage with gaps, and a lack of proper spousal coverage. Take the extra step and get a policy that will protect your family.
Overwhelmed? Don’t Be!
Completing these documents and taking out an insurance policy may sound like too much to tackle all at once, but the Tomorrow app makes setting yourself up for success simple. You can select your life insurance and get started on your will in just minutes. From there it’s as easy as putting one foot in front of the other.