What kind of estate planning documents do you need and why do you need them?

First and foremost, you need a Last Will and Testament. This document determines how your assets will be allocated after you die. It names someone, formally known as an executor, as the person who will carry out your directives. And, a Will can select a guardian if you have minor children that need care.

Second, you should set up a Durable Power of Attorney (POA). What this document does is it appoint someone to manage your finances and legal affairs if you’re unable to. Plain and simple.

Third, you should have a Health Care Power of Attorney (a.k.a. Health Care Proxy). It is also known as an Advanced Directive or Health Care Directive. This document gives permission to someone you designate to approve medical decisions for you if you can’t do it yourself.

Fourth is a Living Will (a.k.a. Advanced Health Care Directive) designates your choice for any other end of life care you may require. Things like being resuscitated, life support, or any other type of care would be included here.

Fifth is a Revocable Living Trust. This document is optional but becoming more commonplace. This document will help your estate avoid probate court. Probate court can take several months or years to complete depending on the scope of the estate so avoiding it is preferable in some cases. Additionally, a Trust can will allow you to direct and allocate your assets confidentially and effectively. For this type of document, you can set up a successor trustee to administer your affairs if you’re unable to or have passed away. I have this.

Moral of the story:

If you haven’t already done your estate planning documents, perhaps it’s time to do so. It’s not just for older folks. If you have children, it’s important to specify who will care for them in case you’re unable. If you have substantial assets, it’s essential to have documentation for asset distribution.

Should you use an attorney or do it yourself? We used an attorney as ours was a little more complicated. I believe trusts are best set up by an attorney. But if you only have a few bank accounts, auto, and not much else, you can probably do your own documents.