Estate Planning: Minimum Requirements

Step 1: Make Sure You Have a Will. Without a will, your estate must be divided in probate court, which is a public process with no privacy.  The process also may cause significant delays in settling your estate and will likely result in added legal costs down the road.

Step 2: Make Sure You Have a Health Care Proxy. A health care proxy is a legal document that assigns, to someone you trust, the ability to make health care decisions for you in the event you become incapacitated. (It also is known as a durable power of attorney for health care, medical power of attorney, or appointment of a healthcare agent.) The health care proxy also defines the relationships you have with family members, physicians, or anyone else who may participate in your care.

Step 3: Make Sure to Update Your Beneficiaries. Many accounts, such as retirement funds and life insurance policies, require owners to name beneficiaries for that asset.  After a significant life event, for example a divorce, many people forget to update the beneficiaries on these accounts.  If there is no beneficiary assigned, the account will have to go through probate court leaving the judge to decide who gets the money and providing no privacy for your estate matters.

Other Recommended Estate Planning Strategies. We have two other recommendations: an irrevocable trust, depending on the complexity of your finances and assets, and a life insurance trust. An irrevocable trust is a permanent strategy for holding assets. A life insurance trust is a permanent strategy where the trust owns and is the beneficiary of insurance policies; upon the death of the insured, the trustee invests the proceeds of the policy and administers them for the beneficiaries.