Estate planning can be a time-consuming and overwhelming process, but it’s a crucial step in securing your family’s financial future and cementing your legacy. By working closely with an estate planning attorney, you can create an estate plan that leaves nothing to chance.

Joel Johnson, CFP® joins Retire Wiser with NBC Connecticut to highlight the essential documents to include in your planning.

Wills and Trusts

A will is considered the most basic component of estate planning, outlining how and to whom you want your assets to be distributed after your death. While this is a critical element of your plan, you may also need additional legal documents to ensure your estate is managed effectively and according to your wishes. For most people, that would be a trust.

Essentially, trusts are about privacy and control. A trust can serve several purposes, such as minimizing your tax liability, reducing probate fees, and preventing beneficiaries from misusing assets. One type of trust is an irrevocable trust, which cannot be modified after it’s established. This type of trust helps to protect assets from creditors. On the other hand, a revocable trust, also known as a living trust, can be changed at any time as long as the grantor is still alive.

Legacy Letter

A personal letter, or what we like to call a legacy letter, gives you the opportunity to share your beliefs around money with your children, grandchildren, or anyone else you choose. This can be especially helpful if you decide to leave a large sum of money to your kids and wish to express your personal values around handling that money. Even if you choose not to leave a monetary legacy, you can still pass down your financial wisdom to those you love.

Health Care Directive

A power of attorney for health care, or a health care directive, is a legal document that names a health care proxy. This is a trusted individual who you appoint to make medical decisions on your behalf if you become incapacitated. A health care directive also helps ensure your wishes regarding medical interventions, life-sustaining treatments, and end-of-life care are clearly communicated to your loved ones and physicians.

It’s important to have your voice heard. Without this legally binding document, medical decisions may fall to family members or health care professionals who might be unaware of your preferences.