Proper estate planning can positively impact your legacy, whether you own a small business or a home, or simply want to spare your loved ones some of the burden and expense of probate court. It's never too early to start planning your estate, and this information can help you better understand the benefits and how each piece fits into a larger plan.
Your estate plan may include a:
- Last Will and Testament - Plan for how to distribute property and care for dependents.
- Power of Attorney - Name trusted people to act or make decisions on your behalf.
- Advance Directive - Communicate healthcare preferences and name trusted people to make healthcare decisions on your behalf.
- Living Trust - Plan for how your assets will be distributed over time.
▢ Tools to start the planning process
Various tools and resources are available to get you started and to make the estate planning process easier. We’ll explore some of these tools in this section. Whether you are just beginning to consider estate planning or are well on your way, these tools can help you create a plan that reflects your values and provides peace of mind for you and your loved ones.
These estate planning tools will help you:
- Get organized around the personal and financial information needed to complete your estate planning documents.
- Document your personal belongings and assets for easy reference.
- Jumpstart conversations and planning around your wants and needs and those of your loved ones.
Estate Planning Tools and Resources
Ask a Rocket Legal Pro™
Get legal advice online or by phone from a Legal Pro that specializes in estate planning because everyone’s situation is different.
Personal Fact Sheet
Organize your personal and financial information.
Estate Planning Worksheet
List and assign value to your personal assets.
Funeral Planning Worksheet
Plan your funeral arrangements.
Quitclaim Deed
Transfer ownership of property directly to family members.
Legal Guide: Estate Planning for Individuals
Covers the benefits of estate planning for single individuals and single parents.
Legal Guide: Estate Planning for Married Couples
Covers the benefits of estate planning for married couples.
▢ Documents for making a Last Will and Testament
A Last Will and Testament, commonly referred to as a Will, is a legally binding document that provides instructions for the distribution of your assets after death, including money, property, and sentimental items. Beneficiaries, including family members, friends, and charitable organizations, are typically named in the Will to receive portions of your estate. An executor may be appointed to ensure that the wishes expressed in the Will are carried out.
A Will communicates to your family and to the courts your exact wishes concerning your property and custody of your children after your death. If your estate is particularly extensive or complicated, you have a complicated family, or an heir with special needs, you might want to consider some legal assistance to get everything sorted out properly.
Essentially, a Will allows you to:
- Decide who gets your property.
- Specify how your property is divided among your heirs.
- Designate a guardian for any minor children.
- State your wishes for funeral services and final expenses.
Will Documents and Resources
Last Will and Testament
Set out your wishes for assets and guardianship.
Codicil to Will
Make changes to an existing Will.
Legal Guide: Last Will and Testament
Covers the importance of drafting a Will, what's involved, and how your Will fits into your broader financial plan.
Legal Guide: How To Choose the Right Executor
Covers what an executor does and things to consider when choosing an executor for your estate.
▢ Documents for making a Power of Attorney (POA)
Preparing for the possibility of being unavailable or incapacitated due to a planned absence, serious illness, or accident is an important part of estate and financial planning. One way to do this is by drafting a Power of Attorney (POA). A POA allows you to transfer certain decision-making powers to a trusted individual, often called an "agent." There are different types of POAs that can take effect in various situations, but they all enable you to grant certain duties to an agent. Drafting a Durable Power of Attorney specifically for finances, for example, can create a legal safety net for your financial affairs if something unexpectedly happens to you. Understanding this legal document and how it can fit into your overall plan is essential.
In general, a POA allows you to name a designated agent to do the following on your behalf:
- Write and sign checks.
- Make household decisions.
- Sign legal documents.
- Make healthcare decisions.
- Run your business.
- Call the shots on whatever else you specify.
Power of Attorney Documents and Resources
Power of Attorney
Authorize someone to make decisions on your behalf.
Durable Power of Attorney
Appoint an agent should you become incapacitated.
Special Power of Attorney
Grant authority to someone for a specific task.
Medical Power of Attorney
Appoint someone to make medical decisions for you.
Mental Health Power of Attorney
Appoint someone to manage your mental health care.
Mental Health Declaration and Power of Attorney
Specify your mental health wishes and name an agent.
Legal Guide: Power of Attorney for Finances
Covers the basics of this legal document and how it may fit in with your overall estate and financial planning.
Legal Guide: How To Choose an Agent for Your Power of Attorney
Covers tips for picking the right agent for your Power of Attorney.
▢ Documents for making an Advance Directive
An Advance Directive, often referred to as a Living Will, serves as a tool to communicate your preferences for end-of-life care to healthcare providers. It also serves as a way to appoint an individual to make healthcare decisions on your behalf. This person is sometimes referred to as a “healthcare proxy” or “agent.” The healthcare preferences and the appointment of a healthcare proxy are the two main parts of this document. Sometimes these parts are divided up into separate documents and sometimes they have different names depending on the state in which they're made.
Consider creating an Advance Directive if you would like a document that covers both healthcare preferences and a healthcare proxy. The Living Will document covers healthcare preferences with an optional designation of a healthcare proxy. The Medical Power of Attorney is just for designating a healthcare proxy. The Mental Health Power of Attorney grants a trusted person the legal ability to make mental health decisions on your behalf if you are no longer able to make those decisions for yourself.
An Advance Directive can help you communicate your preferences for:
- Life sustaining treatments.
- Medications or pain management.
- Grooming and bathing.
- Spiritual or religious support.
- Autopsy and organ donation.
Advance Directive Documents
Advance Directive
State your healthcare preferences and name a trusted decision maker.
Living Will
Make your end-of-life medical wishes known.
Medical Power of Attorney
Appoint someone to make medical decisions for you.
Mental Health Power of Attorney
Appoint someone to manage your mental health care.
Mental Health Declaration and Power of Attorney
Specify your mental health wishes and name an agent.
▢ Documents for setting up a Living Trust
A Living Trust is a legal document that allows you to transfer your assets, such as property, investments, and bank accounts, into a Trust during your lifetime. The Trust is managed by a trustee of your choosing, who can be yourself or someone else, and the Trust's assets are distributed according to your wishes after you pass away.
Like a Will, the Trust allows you to specify where your assets will go after your death. But because the Trust owns everything when you die, there are no assets that need to go through probate court. Avoiding probate means you’ll save on expenses, your heirs should receive property sooner, and your estate and assets won’t be a matter of public record. A Trust also allows you to distribute your assets over time, rather than all at once following your death.
In short, a Trust allows you to:
- Detail how and when your property is distributed.
- Take advantage of certain tax laws.
- Dictate how money is distributed over a long period of time.
- Have more privacy.
Trust Documents and Resources
Living Trust
Plan the distribution of your property and assets.
Joint Living Trust
Set up a Living Trust with your spouse.
Certification of Living Trust
Facilitate the transfer of assets to your Living Trust.
Trust Letter to Mortgage Lender
Notify your lender of property transfer to a Trust.
Trust Letter to Bank or Broker
Transfer accounts or assets to a Living Trust.
Special Needs Trust
Provide for someone with special needs.
Pet Trust - Appoint a pet caretaker and provide an allowance.
Digital Asset Trust
Arrange for distribution of digital assets upon death.
Legal Guide: Living Trust
Covers how Living Trusts work, what they include, and whether you need one.
▢ Legal advice to jumpstart or review your plan
Estate planning can sometimes involve strong emotions and hard decisions. The more complicated your situation is, the more likely you will want to consult with a Legal Pro to make sure your overall plan accomplishes what you currently want it to.
Here are some ways you may want to leverage attorney advice:
- Gather your personal and financial information using our planning tools. Then seek advice from a lawyer about the documents that make the most sense for your specific situation.
- Carefully review our resources and create draft estate planning documents in order to understand your own needs and the plan that you want. Then consult with a lawyer to finalize your estate plan.
- Work with a lawyer to create your basic estate plan from the ground up and add on documents for more specific assets or changes later on (i.e. digital assets or amendments to your Will).
If you have more questions about completing or updating your estate plan, reaching out to a Rocket Legal Pro™ is an easy and reliable way to get affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
