You may have heard that estate planning can help protect your family and assets after your death. It’s true that without a valid will, the court will divide your estate according to Tennessee’s intestacy laws. But estate planning is much more than drafting a will. Several important documents will explain your end-of-life wishes beyond what happens to your assets after you’ve passed. At Batson Nolan PLC, we work with our clients to develop a comprehensive strategy that uses the right documents for estate planning to meet their needs. Contact us today.
What Documents Are Needed for Estate Planning?
Life expectancy in the U.S. declined from 2021 to 2022, from 77.0 to 76.1 years. The COVID-19 pandemic, injuries, and heart disease contributed to the decline. However, estate planning doesn’t only benefit older adults. An estate plan can benefit people of all ages, especially those with children. When the unexpected happens, your estate planning documents will help your family make decisions about your healthcare, finances, and burial. Given the benefits, you might wonder, What documents are needed for estate planning? Below is a list of six essential documents to consider including in your estate plan.
1. Advanced Health Care Directives
Two major documents go into an advanced directive—a living will and a durable power of attorney for health care. These documents explain your wishes for medical care if you are incapacitated and unable to speak for yourself.
A living will is a list of the medical care you want when you are dying or permanently unconscious. You can agree to or decline surgery, drugs, CPR, or other medical treatment to sustain or restore vital bodily functions. Your plan may include consenting to the administration of artificial nourishment or hydration or opting to withdraw that support after a certain period. You may also agree to palliative care, such as pain-killing drugs. A living will often includes your wishes for organ donations, religious preferences, and cremation or burial.
A durable power of attorney for health care appoints a person to make medical decisions on your behalf. This person is called an attorney-in-fact. When you are unable to express your wishes, your doctor will look to your attorney-in-fact to make decisions about your care. When appointing a healthcare attorney-in-fact, it helps to discuss your views, thoughts, and values with them. Talking to your family about the care you want in an emergency or at the end of your life will prepare them to make judgments that match your values as closely as possible.
2. General Durable Power of Attorney
A general durable power of attorney appoints a person to handle your finances. When you become incapacitated, your attorney-in-fact can make decisions about your property and money. They may sign checks, collect income, sell property, and manage your business as you would if you were able to. You can authorize your attorney-in-fact to make a wide range of decisions, giving you more control over what someone can do on your behalf. When designating an attorney-in-fact, choose a family member you think will be the most level-headed and can best carry out your wishes in an emergency.
3. Last Will and Testament
A last will and testament describes what you want to happen with your estate after your death. You will name beneficiaries, determine how your property will be distributed, and appoint an administrator to handle the details. Most people name their spouse and children as beneficiaries. You can also include instructions for charitable giving or have property to go to other family members or friends. If you have minor children, you can also use your will to name guardians for them. Drafting and authenticating a will is essential to ensuring that your estate quickly goes to your beneficiaries rather than being tied up with disputes in probate.
4. Living Trusts and Testamentary Trusts
If you have property that you want to pass on to a particular beneficiary, you may want to place it in a trust. A living trust is one that you create while you are alive. On the other hand, a testamentary trust forms upon your death. Typically, the trust documents name a beneficiary and appoint a trustee. The trustee must follow the instructions in your trust document, including when and how to distribute the trust property.
5. Beneficiary Designations
Although not technically an estate planning document, naming beneficiaries of your accounts and insurance policies is a vital step to ensuring your family is cared for after your death. Property such as retirement funds (including IRAs and 401(k)s), life insurance, and annuities can all have named beneficiaries. The procedure to assign them is usually relatively fast and straightforward. You should review who the named beneficiaries are on your accounts and revisit the matter regularly to make sure the designations reflect your current wishes. Life changes that might influence your choice of beneficiary include getting married, divorcing, having or adopting a child, or a child reaching a certain age.
6. Business Succession Planning
The estate planning process should also include a plan for managing your business if you pass away. Succession planning explains who you want to take over your company after you die. You can set arrangements with family members, co-owners, non-family owners, and third parties. You may delineate rules for how much say you want to have if you’re retiring, who will pay taxes, and how to dispose of your shares or interest in the company. These are all issues that you can address with careful succession planning.
Batson Nolan PLC: Planning Tennessee Estates Since 1860
Death is something that will eventually happen to every one of us. As a result, it is crucial to take steps to plan your affairs early. Planning helps your loved ones understand your wishes and navigate their feelings in a difficult emergency. It also helps your loved ones receive the benefits they are entitled to. At Batson Nolan, we have helped generations of Tennesseeans plan for the future. We offer a wide variety of estate planning assistance, including drafting and revising wills and creating powers of attorney and trusts.
We also have experience assisting Tennessee farmers with estate planning. We can help you document your wishes for your care in case of a farming accident and your plans to pass on your legacy.
Whether your estate planning needs include a complex estate or a simple healthcare directive, Batson Nolan has the experience to meet your needs. Contact us today to schedule a consultation.