Summary of Estate Planning Documents and Tips
There are steps that you can take to memorialize your wishes and steps that you can take to keep as much of your estate out of the court as possible.
Wills:This is a document that sets forth instructions on what to do with your property. You can also set out how to provide for minor children by naming guardians (referred to as Standby Guardians in Missouri) and setting out instructions on how to handle money and property on behalf of the children.
Trusts:This is a documents that sets out a financial arrangement that allows a third party known as a Trustee to hold and manage assets on behalf of a beneficiary or beneficiaries. There are any number of ways that trusts can be set out.
Power of Attorney:A document that designates a person known as an Attorney in Fact to make decisions on your behalf when you become incapacitated. It can be for medical decisions, financial decisions, or, both. It is important to include a trigger or an event upon which the Power of Attorney will take effect. An example might be when two doctors agree that you are unable to make decisions. Otherwise, a power of attorney without a triggering event allows the Attorney in Fact to take over your life.
Health Care Directive:A document that allows you to set forth your wishes should you become incapacitated and end of life decisions must be made.
Beneficiary Deed:A document that allows you to transfer real estate to a beneficiary upon the death of the final owner of the real property. We always recommend that a client also designate *Transfer on Death* on any titled vehicles and *Pay on Death* for any bank accounts and make sure all of your beneficiaries on any life insurance policies and investment and retirement accounts are designated and current.
TipsBelow are four (4) simple task you can perform to help make your family prepared for unfortunate eventualities:
1) Go to DMV and make sure that all of your titled items, such as cars, trucks, 4 wheelers, trailers, boats and recreational vehicles/trailers are Transfer on Death to whomever you like.
2) Make sure your bank accounts are Pay on Death to whomever you would like. (I never recommend having anyone other than your spouse on your checking account. It's just dangerous.)
3) Make sure you have designated (up to date) a beneficiary and a contingent beneficiary on all life insurance, 401K (and other retirement or pension plans), investment accounts and any other account you can make such designations.
4) If you own real property, I suggest a Beneficiary deed. The beneficiary deed leaves you in complete control of your real property until death. Then, on death, it automatically transfers to whomever is listed in the deed. Up until death you can sell it, mortgage it, or give is to someone else.
I recommend that you speak to a tax professional about whether your estate will have tax consequences upon death. The level changes, so knowing the current levels is always important.