7 Documents You Need to Fill Out Before You Die

Here's a list of all the important estate planning documents you'll want to compile.

Estate planning is the process of establishing a framework to manage your assets upon death, disability or incapacity. It involves creating documents that outline your wishes. While estate planning is not a pleasant task, it is critical that you implement it before you need it.

Here are seven critical documents necessary to cover the aspects of a well-devised estate plan.

1. Last Will & Testament

The fundamental purpose of a will is to outline who will receive your assets upon your death. Another important purpose of a will is to specify guardianship for your minor children. A guardian is one who takes legal responsibility for the care of your minor or incapacitated children after you are gone. It is important to understand that a will does not become effective until the date of death. So it does not provide any benefits during your lifetime. A will can be changed at any time (assuming you are not mentally incapacitated). It can be amended by using a codicil or revoked by writing a new will. A will can also create a trust upon your death (more on this below). If your estate is large enough (over $5.49 million in 2017), you may also need to incorporate federal estate tax planning into your documents.

2. Trust

A trust is a legal instrument that provides ongoing management for your assets. It can be inter vivos (also known as a Living Trust, which exists during your lifetime) or Testamentary (one that is created by your will upon your death). It is a good idea to leave assets in trust if the beneficiaries are minors, incapacitated, or if they are simply not fiscally responsible. The trust document names a trustee who has the responsibility of managing the assets in the trust and determines when and how much of the trust assets to distribute (subject to the terms you have written in the trust). You may want to name a trustee while your child is under a certain age, say 25 or 30. Then, once your child reaches that specific age, they can either act as their own trustee, or the trust can terminate and distribute all of the assets to your child outright.

3. Power of Attorney

A Power of Attorney allows you to empower someone else to act on your behalf for legal and financial decisions. It can be a Durable Power of Attorney, which becomes effective immediately, or a Springing Power of Attorney, which becomes effective upon a stipulated event, typically when you are disabled or mentally incompetent. It is critical that you completely trust the person to whom you provide this power, as he or she can legally act on your behalf.

4. Healthcare Power of Attorney

A Healthcare Power of Attorney (also known as a Medical Power of Attorney) gives a trusted individual the authority to make decisions about your medical treatment should you be unable to do so on your own. No financial authority is granted in this document, only medical power. So you could provide one person the Durable Power of Attorney and another person the Healthcare Power of Attorney if you desire.

5. Living Will

While the Healthcare Power of Attorney authorizes another to make medical decisions on your behalf, a Living Will (also known as a Directive to Physicians) sets out your predetermined wishes regarding end-of-life care should you become terminally ill or permanently unconscious. Essentially it takes the decision to withhold life out of the hands of your medical providers and the ones you love so that they are not burdened by it and so that you can be assured your wishes are respected.

6. HIPAA Release

One of the important provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) is the obligation that medical records be kept confidential. While this is definitely an important requirement, it can have severe unintended consequences. Without the legal authority to share medical records, your family may not be able to obtain important information regarding your medical condition and treatment if you were to become incapacitated. A HIPAA release allows your medical providers to share and discuss your medical situation with whomever you specify in the document.

7. Letter of Intent

A Letter of Intent is a simple, non-binding personal letter to the ones you love expressing your desires and special requests. It may include information regarding burial or cremation, or a specific bequest of collectibles or personal items. While it does not typically have legal authority, it can help to clear up confusion regarding your personal preferences.

Estate planning can be complex and the laws vary widely by state. This article is general in nature and is not meant to provide legal advice. I recommend that you engage the services of an estate planning attorney to discuss your wishes and prepare the appropriate documents.

[Editor’s Note: You can find more on estate planning here. There are also some tips to ensure your debt after death doesn’t harm your family here. Also, it’s a good idea to get your free annual credit reports every year so there are no surprise debts that need to be addressed. You can get a free credit report summary every 14 days on Credit.com.]

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5 Money Mistakes Parents of Special Needs Kids Make


Parents of a child with special needs face unique challenges when planning their estates, and unless they address them correctly, they risk making mistakes that could have long-term, costly consequences for their child.

For example, they may make the child ineligible for important federal government benefits once he or she becomes an adult, and they may leave their child without the financial resources he or she needs to live the same kind of life they provided when they were alive.

This article is the first of two that will discuss the biggest estate planning mistakes parents of special needs children tend to make.

1. Disinheriting the Child

As adults, children with special needs typically rely on means-tested federal programs, like Supplemental Security Income (SSI) and Medicaid, to help pay for their basic needs such as food and shelter. (A means-tested program is one in which eligibility is based on a potential recipient’s financial resources.) Therefore, to ensure that their special needs child will be eligible to participate in these programs, parents are sometimes advised to disinherit him or her.

The problem with this advice, however, is that means-tested federal programs typically finance a very minimal standard of living, and unlike adult children without special needs, special needs children may not be able to supplement those benefits through work.

A far better option is for parents to set up a Special Needs Trust to benefit their special needs child. Also called a Supplemental Needs Trust, this trust lets parents leave their special needs child an inheritance without jeopardizing his or her eligibility for federal benefits. Furthermore, a Special Needs Trust can also benefit a special needs child should his or her parents become incapacitated. And by the way, anyone who wants to provide for a child with special needs — like grandparents, for example — can establish a Special Needs Trust or contribute to one that has already been set up.

A Special Needs Trust is complicated, so parents should not try to establish one themselves; they need the help of an experienced attorney. The attorney will also help them make certain that all of the beneficiary designations on their life insurance and retirement accounts are coordinated with the trust. (Full disclosure: I am an estate planning attorney.)

2. Procrastinating

None of us know when we will die or if we will become incapacitated, so it’s essential that we plan our estates sooner rather than later. Ignoring this advice can have very negative consequences for the people we leave behind, including minor children and especially minors with special needs. Among other things, parents’ failure to plan can mean that their children don’t have the financial resources they need to continue living the kind of life they enjoyed while their parents were alive.

3. Not Making Your Planning a Team Effort

Estate planning for a special needs child is complex, so it’s critical that parents assemble a team of experts to help them ensure that estate plan does what they want it to do. This team should include an attorney with specific experience in the area of special needs planning; a life insurance professional to help ensure that there will be enough money to enhance the benefits parents want for their special needs child; a CPA who can prepare the Special Needs Trust’s tax return if one is needed; an investment adviser to ensure that the resources in the trust fund will last for the child’s lifetime; as well as any other key advisers who may be necessary to help support the goals of the trust.

4. Ignoring the Particular Needs of a Special Needs Child

Planning that is not designed to meet the specific needs of a special needs child will probably make that child ineligible for essential government benefits. A properly designed Special Needs Trust promotes the comfort and happiness of a special needs child without sacrificing his or eligibility for those benefits.

Such a trust can pay for a multitude of things, including medical and dental expenses; annual independent check-ups; necessary or desirable equipment (like a specially-equipped van); training and education; insurance; transportation and essential dietary needs.

Furthermore, if a Special Needs Trust is sufficiently funded, a child can also receive electronic equipment and appliances; computers; vacations; movies; payments for a companion; a more appropriate dwelling and other things that help maintain the child’s self esteem and enhance his or her quality of life — the sorts of things his or her parents may be able to provide the child now as a minor, but not as an adult.

A generic or “form” special needs trust is often unnecessarily inflexible. As a result, distributions to the child are overly strict, and certain luxuries the child might otherwise have been able to enjoy are forfeited.

5. Including a ‘Payback’ Provision in the Trust

Another frequent mistake occurs when a Special Needs Trust includes a “payback” provision. A payback clause provides that any money remaining in the trust when the beneficiary dies is paid to the government or state where the beneficiary was living, rather than to the family. Although a payback provision is necessary in certain types of Special Needs Trusts, a qualified attorney can ensure that any money left goes to the family, not to the state.

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