Estate Plan Documents

What documents do you need in a basic estate plan, what is their function, and a bonus that you’re not going to read on any website or hear about from most financial advisors?

Hi, I’m Troy Sharpe, CEO of Oak Harvest Financial Group, author of the upcoming book, Core Four, CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), and host of The Retirement Income Show. Down below, I want you to comment when you think the appropriate age is to get your basic estate plan in place.

The first document, of course, is your Last Will and Testament. The Last Will and Testament is simply instructions for the judge to follow that he will distribute your assets to those that you care about. The next document you need is a Living Will. A Living Will is your healthcare directive or advanced directive. This informs the doctors, the medical community, how you want your end-of-life care to be administered. The next documents you need are Powers of Attorney.

Powers of Attorney empower somebody you trust, maybe it’s a family member, maybe it’s a spouse, maybe it’s a friend, to transact on your behalf should you become incapacitated. The next document you need, especially if you have little children, is Guardianship Papers. If something happens to you, who do you want to take care of your kids?

You have to have this in writing. You need Guardianship Papers. If you have children, this is a must. If you don’t decide who will take care of your children, the courts will decide who will take care of your children. The next document you need are Beneficiary Designations. The Last Will and Testament only covers assets that do not already have a beneficiary designation.

Your retirement account at work, if you have any IRAs, if you have any life insurance policies or annuity policies, all these documents have beneficiary designations and they will bypass the will. They’ll bypass any trust you have as well. They will go directly to whom you’ve named the beneficiary, so make sure your beneficiary designations on your IRAs, your 401ks, your life insurance policies are all updated and your money is directed to go to those people who you want to receive it. Now, we live in a digital age. One document that almost everyone forgets about is a Digital Document.

This document lists your usernames and your passwords for your bank accounts, maybe your social media, your email, to help whoever is taking care of your estate, make it easier for them so they have access to ending some of these things or managing some of these things. If this is important to you, make sure you have that digital document so they can access these things after you’re gone. Now for the bonus, and this won’t cost you anything.

You want to make sure on all your financial accounts, if it’s a bank account, you want to make sure it’s filled out as what we call a POD Account. This stands for Payable on Death. Now, what this will do, all your bank accounts, it will bypass the will, you’ll name beneficiaries payable on death to whomever you choose, and it will bypass probate, it will bypass the will, and your money will go directly to those that you care about so they can have access to it immediately upon receiving a death certificate if something were to happen to you. Now, for your investment accounts, your Brokerage Accounts, it’s a different form.

It’s called TOD, and it stands for Transfer on Death. Once again, you’ll fill this form out, name your beneficiaries, and upon your demise, in receiving the death certificate, your beneficiaries will have immediate access to your investment account, which can help them pay for bills, pay for maybe funeral costs, and have access to that money without leaving it up to a judge to decide when and how they will get paid.

When we talk about a basic estate plan, you don’t have to be 60 years old or 70 years old before you get one of these in place. If you recently got married, or if you’re at the point in your career where you’re starting to save some money, you need a basic estate plan.

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