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My parents taught me to leave things better than when I found them.  That rule applied to everything from my room to the campsite at which we had spent our vacation.  So it’s understandable that I’m passionate about leaving an estate that is organized, that eliminates needless expenses and delays, and reduces the potential for conflict between surviving family members.

The following are eight key documents that together make a powerful and effective estate plan.  As with any plans, it is crucial to keep these documents current, and update them when your life changes.  With these eight documents in place, you can unlock success for your family when you’re no longer there to take care of them.

1. Last Will and Testament

A will lets you choose who receives your stuff after you’re gone, and who will be in charge of distributing the assets.  You also choose who will be the guardian of your children in your will.

2. Revocable Living Trust

Revocable Living Trusts are amazing tools that can do more than most people realize.  Besides avoiding the wasted time and expense of probate, they can be used to provide protection and guidance for your children, protect special needs children, balance needs of your surviving spouse and your children, reduce exposure to estate taxes, and much, much more.

3. Power of Attorney

If you become incapacitated, the Durable Power of Attorney form ensures that your financial life won’t grind to a disastrous halt.  This document gives the person you choose the ability to handle financial matters for you, within the limits you set.  If you don’t have one, your family may need to file for conservatorship (another time-consuming and expensive process) instead.

4. Health Care Directive

Similar to the Power of Attorney, the Advance Health Care Directive gives the person you choose the ability to talk to doctors and medical providers about your condition, and make decisions when you can’t.

5. Beneficiary Designations for Retirement & Life Insurance

Your life insurance and retirement plans are controlled by the beneficiary designation forms provided by the specific company.  It is important to keep these forms up to date, so that an ex-spouse, etc. doesn’t end up with your hard earned savings and benefits.

6. Your Digital Library

Your iTunes Library, Amazon Video Library, Facebook account, the place you store your pictures online, and more, all have different policies for handing their accounts.  Google now has a handy Inactive Accounts Manager which, after a designated period of time of inactivity, will automatically share your data with the person you’ve selected, or delete your account.  For other accounts, make a list of them, and your passwords, and keep them in a safe place your executor can get to.  Don’t put this in you will, as your will is a public document!

7. List of Assets

The last two documents aren’t legal documents, but key documents to make your executor or successor trustee’s life simple.  You know what is going on in your life, but the person coming behind you won’t, unless you tell them.  Make a simple list of what you own, your financial accounts, and life insurance policies.   Put that list with your estate planning documents, and keep it current.

8.  Letter of Intent

A good document to prepare yourself before and after meeting with your estate planning attorney is a letter of intent.  Not a legal document, you can use this letter to explain your choices, if necessary, and relay any wishes you may have, for example your funeral arrangements.  While this is a great document to explain your wishes in non-legalese, realize this letter is not legally binding.

Finally, keep all these important documents in a safe place.  I like to recommend a fire-safe box in your house, with copies in another safe place outside your home, like a bank safety deposit box.  Your bank safety deposit box isn’t a good place for the originals, because your executor may need the originals to get access to the safety deposit box.

There, that looks better doesn’t it?

Image courtesy of Stuart Miles / FreeDigitalPhotos.net