4 Key Estate Planning Documents You Need

According to a 2020 study1 by Caring.com, the number of people with a will in the U.S. has decreased 24% since 2017. While you might think that you don't need a will for various reasons, a will is just one of the important estate planning documents you should consider creating to protect yourself, your family, and your wishes.

The four documents below will help you easily shore-up any gaps in your estate planning.

Durable Power of Attorney

A durable power of attorney lets you designate a person to make decisions in your place. If you become unable to make your own financial decisions, your loved ones might find that they lack the legal ability to access your finances on your behalf.

You can have a medical power of attorney that specifically addresses healthcare decisions and medical directives. Each state has its own requirements for medical powers of attorney and advance medical directives.

You should be aware that most powers of attorney are effective immediately upon execution and can be used by your chosen attorneyin-fact unless you specifically provide that the power of attorney only becomes effective at the time you become incapacitated and unable to make decisions for yourself.

Advance Medical Directive

Advance medical directives state your instructions for how your medical care should be handled when you're no longer capable of making those decisions and make clear who can make medical decisions on your behalf. You can designate whether you want your life to be prolonged by artificial means, pain medication administered, and if you want to donate your organs. While you're under medical care, if you do not wish to be resuscitated, this is called a Do Not Resuscitate or DNR order.2

Each state has its own requirements for advance medical directives. The AARP website has free, state-specific forms3 you can download and have notarized.

Will

While the documents above give instructions about what's to be done while you're alive, a will handles how you want your assets to be handled after you die. You may think you don't have enough assets to worry about making a will. However, anyone with minor children (regardless of their assets) should consider making a will, since you can use a will to specify who will care for your children in the event of your death.

When you create a will, you'll name an executor who will be legally in charge of distributing your assets according to the terms of the will during the probate process. You can also include a "letter of instruction" with your will, which state your preferences for things like your funeral or other specifics about your estate. A letter of instruction isn't legally binding, but it can help your executor and family know your intentions and wishes beyond how your assets will be distributed.

Wills must be probated by the appropriate court (depending on where you live). Your property will be distributed according to the provisions of your will and any applicable probate laws.

Revocable Trust

A revocable trust, sometimes called a grantor trust or living trust, is an alternative to having your assets distributed at death. The trust is created while you're still living and it's called a "revocable" trust because you're able to revoke and amend it during your lifetime.

When you create a revocable trust, you transfer ownership of the assets to your trust so that the trust is the owner and when you die the trust controls the ownership of the assets and not your will or your state's rules of descent and distribution. The trustee manages the assets, including distribution of income and principal during your life and handles distribution of assets to the beneficiaries named in the trust after your death. You can be the trustee of your revocable trust while you are alive and nominate successors who may take over if you become unable to serve as trustee and to serve after your death. A revocable trust also serves to hold down probate expenses and offers privacy because the trust is not probated and therefore not part of the court records.

A consultation with an estate planning professional can help you decide if your estate would be better served by a will or living trust. Call us at 1- 888-SYNOVUS (1-888-796-6887) to connect with a trust expert who can assist you in navigating this important life stage.